William,
Interesting point indeed! I will definitely have to get a copy.
Is it online anywhere? Another article I read also touted Atmel
as a great long-term investment since it's insiders have been
hanging on to their options + buying shares on the open market.
If I was an insider and knew that things were about to fall apart,
I would have dumped them fast!! However, if I knew things were
going to get rosier down the line...
Things might be rough in the short-term, but I would like to focus
on the January report now. Since (1) mutual funds are reducing their
stake in the stock; (2) analysts are lowering their rating; (3)
earnings expectations are being cut, what will it mean if ATML
beats estimates by a penny in January and says that "we have been
able to integrate our new products into the market and should realize
gains in our earnings next quarter": (1) mutual funds will go into
a buying frenzy; (2) earnings expectations will rise; (3) analysts
will higher their expectations. Add to this the probability of
a favorable vote on Prop211 and what do you get? Price reductions
and falling margins are part of the industry, but if you release
new, state-of-the-art products in the market which give you an
added niche above the competition, you can get a premium for them,
as Atmel has been able to do in the past.
Look for a rough short-term ride (which will make Steve Covin an
even richer man), but we'll probably be right back where we started
(in the mid-30s I would guess) before the next earnings report.
If the stock goes to 25 or below, I would buy options 2 months into
the future...I still hold 2/3 of my initial position in the stock...
Vikas |
