Verona, I assume you mean Adaptec, as there is no symbol APDT. Basically, I hate pc suppliers, fundamentally, but ADPT has already been creamed. They are pulling the old big writeoff trick and laying people off, which means that reported earnings will not look as bad as they should. Wall Street often falls for this trick. If it falls for it again, you could see a bounce of 20-30 pct by this summer. Longer term, and I mean a lot longer, after the pc meltdown and after a new product starts the dollar sales improving again, you will probably see a full recovery in ADPT. The co. has been in lots of cycles in the past and barely survived them all.
CFMT is a different story. Its main customers, chip companies, are hurting puppies. Also, this is one with a lot of Motley Fool participation, which means it is in very weak hands. I don't see a chip industry recovery until after the turn of the century, and that bodes poorly for CFMT if I am right. Unlike Adaptec, this co. is relatively unseasoned and was pushed by market hypesters who just don't do their homework. Those types generally disappear at the first downtick. $13 and change doesn't look like a lot of money, but I see this one getting to $6-8 as the losses continue to pile up. So, ex a huge, unforeseen recovery in chip prices, I don't see this one doing anything good for years. The one bright point is that revenues are still growing, even though margins are negative. So their product is fairly well accepted. But you don't sell much when chips are down for the count.
Part of my advice would depend upon where you hold these stocks, regular account or IRA, and how important they are to you. If they make up 5 pct. of your holdings, and the other 95 pct. is conservatively invested, you might want to hold them in case there is another feeding frenzy and the momentum geeks in technology recover their lost luster. If you hold them in an IRA, I would say that CFMT is simply not the sort of stock that should be in an IRA. Adaptec is ok in a diversified portfolio. If you hold them in a regular account, you have to think about the tax writeoff you would get from the sale at a loss.
I'm sorry you had a bad experience with these two and hope your other and future investments are kickin' butt now and takin' names later.
Good luck, MB |
