Seagate Technology - Fundamentals Message Board

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Technology Stocks : Seagate Technology - Fundamentals

STX 442.80

+19.0%

Jan 28 3:59 PM EST

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To: Stitch who wrote (468)	1/16/1999 5:25:00 PM
From: Kevin Linder	Read Replies (1) of 1989

Stitch-- I still follow this board and have just a few thoughts about the recent earnings report of SEG. 1) Earnings surprises on the upside are a very welcome change from what has happened recently. 2) Notice the increase in cash flow. Extremely strong growth in relationship to earnings. 3) Luzco is continuing to trim headcount. I think this is important because SEG has historically been most profitable near thes levels. It sounds like an overall drive to get more out of the employees rather than to increase head count. 4) Apparently, SEG must have taken a pass on buying SYQT assets. This speaks to a focus on core products and competencies. I am conjecturing here becuase of the rampant rumours that SEG would buy SYQT to compete with IOM. 5) While I was watching some of the various computer shows this afternoon, featured most prominently were hard drives for TV. A market that SEG is pushing hard. Reports were demand for these products are high. 6) Europe is looking like a strong technology market this next year. Isn't SEG stronger than WDC in Europe? IMO, SEG may have additional opportunities for growth by virtue of their strong worldwide presence. 7) The balance sheet tricks are just about done. Luzco has released pent up value from the networking division and the new Dragon IPO should be very successful. The only thing left is a possible carveout of the manufacturing part of SEG or possibly Sandisk. I would rather see them concentrate on operations from here on in though. Finally, I am glad this turkey finally started moving up! It looks like this may have potential for a sustained move. I wish that one of the weaker players would have fallen out or gotten purchased though. If that would have happened that would have been a classical end of a disk drive war. Until that happens, I guess we have to hold our breathe and wait for the next wave. How's the surfing look from were you are? Kevin Linder

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