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Technology Stocks : Smart Modular - diamond in the rough?
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To: Robert Elfstrom who wrote (1320)5/19/1998 2:24:00 PM
From: Adam Nash  Read Replies (2) of 2020
 
When companies warn about earnings, especially tech companies, there can be a significant boost from just meeting the new expectations. The high risk for companies that warn is that there is more bad news to come.

If the investor community gets earnings that seem to be "on track" with their thinking (ie, meeting estimates), that can reduce some of their implied risk, ie, the risk that things are worse than they think.

Compaq saw a lot of this with their last earnings announcement. Only $.01, but that was at/above estimates and it put a value to the damage.

I think if SMOD comes in with $.30 +/- $0.02, the street should feel better that they understand the extent of the damage. Like Compaq, we could see a significant short-term gain.

At the same time, I don't like timing these things. My policy would be to look at your portfolio, and if you feel that adding to your SMOD holdings is the best investment you can make now, do it. It certainly seems attractively valued, in both an absolute and relative sense.
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