*AV*--CFMT is being considered as "dead money" right now by me. I am holding onto these shares and taking advantage of the low price to accumulate shares for the longer term. Management aside, the technology offered by CFMT is necessary for the 0.25u and below device technology. With all the chaos in the market, especially with the Pacific Rim usually one of the first to implement (into full production) new process and equipment technology as offered by the likes of CFMT have been derailed temporarily (the foundries need to be able to supply these services). So I guess until the IC tech sector is stronger and the Asian Crisis shows signs of definite improvement, CFMT will be in limbo. Its time is not right now but bears careful watching and accumulation for the major run it may enjoy as times get better. It is an enabling technology. The only other upside is a possible takeover by a larger company should this industry consolidate. At these prices and for what it has to offer, this makes sense.
CRUS-your comments are right on the mark. However, this is "quality capacity" that is going underutilized. Any pick up in business or need for foundry services by a newcomer in the market can be leveraged real well here. All dressed up and nowhere to go yet. Remember that IBM will be allowed to foundry the IDTI processor for low end systems. You never know where these things may be run. Also, CRUS has some decent designs that have yet to get out of the starting gate. I am not as pro-CRUS and I am CFMT but at these levels picking at this stock might be something to consider.
With the above said, it should come as no surprise that I had been rather cautious in this sector and have been raising my cash position and dramatically reducing margins. The IC arena is starting to bleed selectively and I am getting ready to use some of the ready cash and margin. However, I am not being aggressive yet.
As we speak, the bellwhether equipment stock is off by about 10% of its recent high and UTEK is close to 15%, just to name a few. The earnings season has started with MOT taking the first hit. For those value investors, MOT is in a buy zone and not because of the earnings release. Look at the lows that it has reached over the past few quarters and the rebound highs and you will see that 52-54 is a good low entry to get into with a 60-62 high target exit. This swing is between 10%-15% in a solid company. I view this is a safe haven for now.
DPMI which got up to ~$45 is now down to close to $40 withpossibly a few more points to $37-$38 possible. Again we have another 10%+ reversal that will be taken care of during this reversal. The list goes on a little further but the point has been made. This overall 10%+ correction will allow me to position myself with 10%+ more shares when I decide to take the plunge once again. SOX is down 10 pts and is well below last years ~400 level with its present ~290 level.
Finally, my Mom is sending me some chocolate chip cookies via FedEx today. Seems she bailed out of ~40% of her CCI and sold CALLs against the rest. That was actually her idea. She hears me speak of leveraging her portfolio like this when she feels that a stock has run to high too fast. I got her to buy back half og those CALLs a few minutes ago for literally a 33% gain. (APR150) She wants to wait until tomorrow to bail out of the rest. Gee, Mom does listen to me occasionally<GGG>.
Andrew |
