*AV* -- here is your bird cage liner Patrick.
Radar Trader Newsletter
High Tech Commentary-- Scan List
September 17, 1998
OPENING COMMENTARY FOR SEPTEMBER 17, 1998 - Andrew Vance
I guess it looks as if the Clinton "affair" is starting to subside and we can get back to the real business at hand. Then again, this week's US News and World Report might very well be a keeper. The big joke today is whether it pays to invest in Altoids, a British Mint company, which might be a subsidiary or affiliated with Phillip Morris. I guess my question is whether the darlings of two years ago, the cigar stocks, will make a comeback. I just couldn't resist.
On a more serious note: Beware, the Triple Witching Options Friday is staring us smack in the face. Expect the unexpected and protect yourself at all costs. Now is not the time to gamble unless you keep on top of things every second of the way.
Two days ago I said the stocks seem to be rebounding, which they have done. However, I still am re-iterating that this might be short lived as we enter the Triple Witching days ahead. Caution should still be the operative word and taking profits when presented should always be considered.
TIMELY TOPICS AND STOCKS
SLVN(26, 0) - whoa Nellie! - When we last spoke of SLVN on Tuesday SLVN(25-1/8, +3), we gave a recap of our comments starting from Sept. 3rd and finished up with "Keep in mind that June through August were extremely lean times for the SLVN Learning Centers for the school kids that were on Summer vacation. We are up just over 10% in 11 days and we still haven't seen the full financial impact of the back to school increase in enrollment. This has already met profit objectives and will be allowed to run with appropriate stops in place to protect profits". We didn't report yesterday's positive move up +7/8 since I took a day off from this free service to work on details for the formal launch of the newsletter. We have moved the stops up to protect profits and will continue to let this run.
USWB(12-15/16, +1 11/16) - made the list today but is also a timely topic based on some YR2K related press releases. Since the YR2K issue is something I follow, it is appropriate to give some ink to this subject.
Sept. 15, 8:05 am EDT - USWeb and Infrastructure Defense Launch Electronic Nerve Center for Y2K Crisis - Largest & Most Comprehensive Web Site is Launched By Private Sector to Help Solve Year 2000 Problem biz.yahoo.com
Sept. 14, 2:29 pm EDT - New Y2Ktoday Poll: 68% of Americans Ignorant of Y2K Problem - Majority Believe Problem Will be Fixed in Time
PRNewswire -- Predictions about Y2K's results include massive power failures, disruptions to telecommunications and the banking system, and shortages of food and other supplies as computer-driven delivery systems break down. Yet surprisingly more than two-thirds of the American public are not aware of the Year 2000 computer problem, according to a nationwide poll released today, and the vast majority express little or no concern about Y2K's consequences. biz.yahoo.com
INTC(85-1/16, -7/8) - the following information may have a bearing on the rumor surrounding INTC going after COMS.
Sept. 15, 10:07 pm EDT - Intel Unveils Computer Chip For Home Networking
(Reuters) - Intel Corp., stepping up its move into networking, said Tuesday it has developed a single chip that will let consumers create a computer network in their home or small office using existing telephone lines. Interesting comments are made along with this a very interesting article anyway. Seems as if INTC is trying to get their hands into everything related to Computing. biz.yahoo.com
DPMI(27-5/8, +5/8) - be on the lookout this morning for a possible drop in share price of DuPont Photomasks. DPMI warned first-quarter earnings may fall below analysts' expectations as a result of weakness in the semiconductor market and over-capacity in the photomask industry. The CEO, J. Michael Hardinger, after the close on Wednesday, stated in a press release that first-quarter earnings will be 19 to 24 cents per share. Current First Call consensus estimate is 39 cents per share. First-quarter revenues are expected to decline as much as 6%-10% compared to the year-ago period. They also announced it will acquire Hewlett-Packard's photomask manufacturing unit for an undisclosed price.
MOT(47-1/4, +3 5/16) - share price rose 7.5% percent after Warburg Dillon Read upgraded MOT "buy" from hold, citing improving fundamentals. Their analyst set a 12-month to 15-month price target of $55 a share. The comes a day after Motorola said it was selling its component products division and reportedly announced plans to halt construction of a $3 billion semiconductor manufacturing facility on the East coast, citing weak PC demand and the Asian economic crisis.
WFR(5-3/16, -9/16) - MEMC fell 10% after they stated their third-quarter loss will be "significantly higher than previously anticipated." They expect sales for the quarter to be between $160 million and $165 million. The lower than expected net sales reflects the general weakness in semiconductor demand, according to WFR CEO Ludger H. Viefhues. Plant shutdowns and excess DRAM capacity were also cited for the drop.
CIEN(12-3/8, -5/8) - looks to be complaining about some dirty tricks that might have been used to sabotage the merger with TLAB. CIEN said it believes an unnamed competitor may have sabotaged the proposed merger. The Washington Post reported yesterday that in an SEC filing, CIEN said it had traced some evidence to an email at Lucent Technologies Inc. Wall Street traders were accused of planting damaging news about Ciena to drive down its stock price. The TLAB merger is dead.
RST SCAN LIST COMMENTARY FOR SEPTEMBER 17, 1998
Only 9 stocks made the list today, which is lower than normal. In addition to this, some of these stocks are not being viewed very positively by me. They are some cautionary comments being brought to your attention.
USWB(12-15/16, +1 11/16) - CKSG(16-3/8, +2 1/16) - both stocks made the list today, as the probably should. The merger looks as if it will be clear sailing for both parties, especially when you deliver good news in the form of Quarterly Results.
September 16, 4:05 pm EDT - CKS Group, Inc. Announces Third Quarter Fiscal 1998 Results and Record Revenues, Net Income and Earnings Per Share biz.yahoo.com
CKSG also is starting to find believers that the deal will go through. They are closing the gap between its present trading range and the pending offer of $21.21 per share stock swap from USWeb. The deal was valued and set at $350 million when it was first announced 2 weeks ago. Both stocks took some price hits over the past few weeks, reflecting the chaos in the market. They have made somewhat of a recovery these past few days.
APCC(36-15/16,+ 1 9/16) - we are still plodding away on this stock as it shows stability in a market that has become rather unpredictable. I would have to go back and check where we first spoke about APCC but I am quite sure that it was lower priced back then. Between yesterday and the day before, we have seen $2 additional positive action over the 1-5/8 on Monday. This has become a 10% gainer in just the last 3 trading sessions and I believe we brought this to your attention at $30 or $31 on or about Sept 7th or 8th. Using the higher number, this would make APCC just under a 20% (19% on $31 and 23% on $30) gainer in less than 2 weeks. Not too shabby for a repeat member of this section of the newsletter. .These positional trades are starting to add up nicely, if you ask me.
Sept. 16, 10:26 am EDT - American Power Conversion Introduces a Compact, Multiple Outlet Strip For Rack-Mount Environments biz.yahoo.com -
Sept 15, 12:02 pm EDT - American Power Conversion's Professional SurgeStation wins "Best Hardware Extra" in FamilyPC's Top 100 Awards biz.yahoo.com
DIMD(5, +3/4) - a nice move of 17.65% for this stock, finally. It also brings it out of "Margin Call" hell and gets above $5 where it is reasonable to talk about. Trading at just under 2X ADV and at less than 1/3 of its 52 week high, we might very well have seen its bottom from which it is recovering from. DIMD got as low as 3-1/2 which was real scary relative to the competitive nature of this business. The following news releases probably helped lift the stock over the last few trading sessions. These announcements linked below are a ray of light at the end of the tunnel for DIMD and it seems like they are in the right place at the right time once again. Worth watching this stock, at a minimum, to see it back on the road to recovery, just in time for the Christmas rush. I would also like to point out that all the stories go back to Monday Sept. 14th and illustrates that the market is sometimes inefficient. Anyone could have jumped aboard this stock at gotten their 17.65% gain today with little more effort than to be cognizant of the company, the news releases, and its possible significance.
Sept. 14, 9:09 am Eastern Time - Diamond Multimedia Enters Into Exclusive Licensing Agreement With MusicMatch and Xing Technology for Popular MP3 Jukebox Software - Diamond Bundles MusicMatch Jukebox Software With its New Rio PMP300 Portable Music Player and PCI Audio Cards for Encoding and Playing MP3 Files biz.yahoo.com
Sept. 14, 9:06 am EDT - Diamond Multimedia and MP3.com Enter Strategic Partnership to Deliver MP3 Content to Millions of Potential Users - MP3 Music Content Goes Portable with Diamond Multimedia's New Rio PMP300 Music Player
biz.yahoo.com
Sept. 14, 9:02 am EDT - Diamond Multimedia and GoodNoise Announce Strategic Alliance to Promote MP3 Music - Diamond Multimedia's New Rio PMP300 Portable Music Player To Help Drive Sales of Downloadable Music From the Internet biz.yahoo.com
Sept. 14, 9:01 am EDT Diamond Multimedia Brings Portability to the Booming Internet Music Market With an Affordable MP3 Music Player - Palm-Sized, Upgradeable Player Uses Flash Memory Technology for Skip-Free Playback of up to an Hour of Digital Quality MP3 Audio for Under $200 Monday biz.yahoo.com
CRUS(8-1/32, +23/32) - trading at less than average daily volume, I refuse to be faked out by these guys again. Five days ago we were in the mid 6s looking at a negative trend. The following 3 days were a flat-line at close to 7, followed by this +3/4 rise. We still need to get back to 10 before I have any confidence. Given the MOT announcement, the weaker expectations out of DPMI, I see no real reason to be overly optimistic here. I will be watching but doubt whether I will get involved. I'll watch from the sidelines here and be upset with myself if something dramatic happens.
ORCL(27-1/4, +1/4) - the news seems to be tailing off a bit but ORCL looks to be doing the slow but sure walk to $30 I was whining about recently. The order of the day is to keep your lower limit tightly placed in case of a reversal, but give it some room to run, at least to $30. HOWEVER, be very careful today and tomorrow, I would almost bet "the bad boys" will start screwing around with this stock for Triple Witching. This could be both good and bad. They might run this puppy up for a quick killing. Any run up should be used as an opportunity to sell into the play. If you own this stock, your best bet is to watch it continuously for the next 3-4 days and REACT. We have seen some upgrades recently, which I find absurd. These 7 figure salary analysts favor this stock AFTER it makes close to a 35% run up. If I didn't know any better, I would think we have a set-up in the making. Stock did trade 1.5X ADV.
Sept. 16, 6:00 pm EDT - A.G. Edwards raised its rating on Oracle Corp. to buy from maintain.
COMS(30-3/4,+7/16) - please refer to the INTC press release in the TIMELY TOPICS section to refresh your memory. COMS seems to be doing well for us and may possibly stabilize even without the INTC takeover rumors. Shares traded above its ADV but not by as great deal. Prudential also raised COMS from hold to accumulate. 3Com to report its fiscal first quarter results on Sept. 22 after the market closes.
A First Call survey of 29 brokers expects to see posted profits of $0.18 to $0.23 per share for the reporting quarter. Active trading in 3Com calls is taking place. The September 30 calls were among the most actively traded (>3,100 contract) on the Pacific Exchange. COMS was up an additional 1/8 in after hours trading.
Sept.16, 6:59 am EDT - 3Com Applauds ITU's Final Decision for V.90 56K Standard biz.yahoo.com
Sept. 16, 8:31 pm EDT - U.S. OPTIONS/3Com vols firm on bid talk, await Q1
Sept 16 (Reuters) - Implied volatility on options on 3Com Corp. remained at the upper end of its recent range as traders looked ahead to the release of the company's
earnings next week. Takeover rumors lingered and also helped keep volatility at lofty levels and probably allow vols to remain firm into next week, according to traders and a market maker.
NOVL(12-3/8, +1/8) - I think we have another candidate for the "slow but steady" group of stocks that will perform. These guys were touch and go for awhile and I guess it is time to say they might just get healthy.
Novell leans on directory CNET News.com Sept. 16, 1998, 5:20 a.m. PT
Novell's strategy will increasingly rely on providing computer networks with its Novell Directory Services (NDS)--a technology whose time, executives believe, has come.
news.com -
ETEC(31-1/8, +3/4) - the warning light has come out on this stock even though it performed well today. I am deeply concerned how well they will be able to sustain themselves given a group of events. DPMI buys HWP mask facility, MOT to mothball their $3 billion plant in Virginia temporarily, and DPMI expecting to report lower than expected quarterly numbers. All this adds up to extra mask making capacity either in reality or perception. Either way, it may filter down to the downstream supplier level. Put very tight lower stops on this and be very careful. No sense in losing anything if the market perception of ETEC turns unfavorable.
AND NOW A WORD FROM THE RADAR ROOM:
I would like to devote some of this section to the Satellite Sector debacle once again, in order to keep tabs on what I believe to be a positional trading opportunity.
LOR(14-3/8, +1 5/16) - starting to recovery nicely as I suggested. On Tuesday Sept. 15th, just after lunch hour a BLOCK TRADE of 150,000 at 12-7/8 down 1/2, crossed by Lehman Brothers. A nice 10% gain for the guy on the correct side of that trade in less than 24 hours.
Sept.16, 10:45 am EDT Loral-Built PanAmSat Satellite Launched Successfully
biz.yahoo.com
QCOM(47-1/2, -3/16) - less than a quarter of a point given back to the market but still up $3-$4 from the original discussion. QCOM is starting to report some significant business opportunities. Shares did edge higher after Salomon Smith and Barney initiated coverage with a "buy" rating.
Sept.16, 1998 07:45 QCOM Signs Partnership with Yokogawa Digital Computer Corp. Diagnostics Solution for the QUALCOMM MSM3000 Chipset to Reduce Time-to-Market for Handset Manufacturers
PRNewswire -- QUALCOMM Incorporated announced a partnership with Yokogawa Digital Computer Corporation (YDC), a leading emulator company and well-recognized leader in the Japanese market. Under the agreement, YDC is developing a new diagnostics solution for QUALCOMM's fifth-generation MSM3000(TM), IS-95-B Code Division Multiple Access (CDMA) baseband modem chipset. QCOM recently introduced the MSM3000 fifth-generation, single-chip Mobile Station Modem, a low-power chipset and software solution enabling the design of small-form factor handsets with very long stand-by times and much higher data-rate services. It is the first single-chip baseband solution for any cellular or PCS standard to enable data speeds up to 86.4 kbps.
QCOM is also a co-developer of the Globalstar(TM) low-earth-orbit (LEO) satellite communications system.
Sept. 16, 6:30 pm EDT - Groundbreaking Live Technology Unveiling and Demonstration for the Fastest Digital Wireless Data Technology of the Millennium
QUALCOMM Inc. the pioneer and world leader of Code Division Multiple Access (CDMA) digital technology, will unveil one of the fastest, most efficient wireless technologies to date. Wednesday September 16, 7:30 am Eastern Time
GSTRF(10-3/4, -1/4) - still ¬ above the initial buy in target so money has not been lost yet for those that participated. Looks like it is slow to the recovery even after everyone realized that the satellites were insured. However, maybe we will see a delayed reaction out of the Taiwan deal announced.
Sept. 16, 2:58 am EDT - Taiwan joins Globalstar satellite phone system
(Reuters) - Taiwan's state-run Telecommunications Company signed an agreement with Globalstar Telecommunications Ltd of the United States to offer satellite mobile phone services on the island. biz.yahoo.com
CYMI(9-11/16, +1 3/16) - I mentioned that I thought this stock was way oversold a day or two when it got into the high 7s. This was the play of the week for me. Even if you were unfortunate enough to invest in the $10-$11 range before the drop, you had the chance to average down and improve your position. The pop today may lead to a slight reversal tomorrow morning since we saw a great deal of press, after hours, relating to the filing of the lawsuit. This is definitely old news but it is being re-hashed and re-hashed again. These lawyers are doing a great deal of damage, more so than the management, in my opinion. Not only are they beating a dead horse, but they are dragging it around the corral a few times. Enough is enough. We have been seeing all this recycled stuff for more than a week. Therefore, we need to be extra careful at the open tomorrow.
Sept. 16, 10:15 pm EDT - Stull, Stull & Brody Files Class Action Against Cymer Inc. -(BUSINESS WIRE)--A class action lawsuit was filed in the U.S. District Court on behalf of purchasers of Cymer Inc. common stock during the period April 24, 1997 to September 26, 1997.
The complaint alleges that defendants' false and misleading statements about rapid acceptance of DUV technology by semiconductor chip manufacturers, strong demand and orders for Cymer's Series 5000 excimer DUV lasers, its strong backlog of shippable orders for these lasers and the lack of technical problems with and defects in its lasers, which would result in 40% - 50% EPS growth for Cymer over the
next several years and 1998 EPS of $1.15 - $1.20, artificially inflated Cymer's stock to a Class Period high of $49 1/4 on August 25, 1997.
During the Class Period Cymer, its top insiders and controlling shareholders sold or disposed of 1,869,086 shares of their Cymer stock and Cymer itself completed a $173 million convertible debenture offering.
Sept. 17, 12:01 am EDT - Cymer Target Of Shareholder Suit -(Reuters) - Technology provider to the semiconductor industry Cymer Inc is the target of a shareholder lawsuit alleging the company released misleading information, lawyers
representing plaintiffs said on Wednesday.
G(39-5/16, -5) Puts on Gillette Co. attracted speculative interest right after they warned of slower sales for the latest quarter. This was one of the "Boiler Room" stocks that I was told I just had to buy in the $49-$51 range. It is amazing that a unique investment strategy is developing. Between HOT, G, PWJ, and a few others, these "brain dead scam artists" are running a 100% error rate. They haven't even been able to pick a stagnant stock but rather those that tank a great deal after they recommend them. I think I will call it the CBR (Contra Boiler Room) Hedge Fund.
Prudential cut earnings estimates on G with MER probably doing the same thing soon. and Merrill Lynch said it probably would take similar action. Gillette Co. should release third quarter earnings on October 15, after the market closes. The Sept. 45, 40 and 50 puts were among the most actively traded options on the AMEX, with volumes of 4,600, 3,000 and 2,800 contracts, respectively.
*****************************************************
Prosearch 5.0* Top Stock Report 09/16/98
*****************************************************
5> USWB - USWEB CORP COM .INT
Price= 12.9 ( 57) AvgVl= 998.9 ( 98) 1-Dy = 114.9 ( 97)
12> APCC - AMERICAN PWR CONVRSN CORP COM .ELE
Price= 36.9 ( 92) AvgVl= 889.9 ( 97) 1-Dy = 104.4 ( 86)
13> CKSG - C K S GROUP INC COM .INT
Price= 16.4 ( 70) AvgVl= 237.8 ( 92) 1-Dy = 114.4 ( 97)
16> DIMD - DIAMOND MULTIMEDIA SYS COM .DCS
Price= 5.0 ( 15) AvgVl= 371.3 ( 94) 1-Dy = 117.6 ( 98)
30> CRUS - CIRRUS LOGIC INC COM .ESE
Price= 8.0 ( 25) AvgVl= 496.9 ( 96) 1-Dy = 109.8 ( 95)
43> ORCL - ORACLE CORP COM .DSO
Price= 27.3 ( 87) AvgVl= 7805.2 ( 99) 1-Dy = 100.9 ( 64)
44> COMS - THREE COM CORP/3COM CORP COM .DPE
Price= 30.8 ( 89) AvgVl= 7576.1 ( 99) 1-Dy = 101.4 ( 69)
49> NOVL - NOVELL INC COM .DSO
Price= 12.4 ( 55) AvgVl= 4148.1 ( 99) 1-Dy = 101.0 ( 65)
62> ETEC - ETEC SYSTEMS INC COM .DSO
Price= 31.1 ( 90) AvgVl= 377.7 ( 94) 1-Dy = 102.4 ( 77)
|
