Well Don, buy more BCST today?
I have so much already in it I laid off, but was
tempted when it went so low. Hey, that's the
nature of this beast. You have to be on your toes!
Check out TECD. I see this one as a short term or
long term play. According to what you want in a
trade. It reminds me of the trade I did with SFSK
a few months ago. Lost like 40% of it's market
share and bounced back real strong real fast!
Here's what J. C. Bradford & Co. had to say about it
after market close.........
<<<<<On Tuesday, February 2, Tech Data released its preliminary results for 4Q99. Sales are
estimated at $3.8 billion, in line with our expectations, which represents growth of over
80% from year-ago levels. However, EPS is expected to be $0.61-$0.64, as
compared with our estimate of $0.69. The shortfall is due primarily to aggressive pricing
particularly in the U.S. market by some of its large competitors, we think Merisel and
Pinacor. We believe this aggressive price war is being driven by these two companies in
an attempt to regain some lost market share over the past three years. At the same time
it is our belief that these two competitors are experiencing very limited profitability and
as a result, the price war is temporary, maybe six months. End-market demand and
sales growth continue to be robust as TECD experienced 12% sales growth in the U.S.,
24% in Europe (excluding C2000), and 9% in the rest of world. TECD also indicated it
intends to tighten credit toward its Latin American customer (sales are 3% of total sales)
which has a few pennies' impact to EPS when a reserve on receivables is included.
Management also noted that its C2000 operations met plan on sales and profitability,
which indicates to us that Europe remains the healthiest region. In addition, management
noted that inventory ended the quarter in line, which is positive compared with the
year-ago bloated conditions in the channel with regard to inventory. We are reducing
our 4Q99 EPS estimate by $0.08 to $0.61, and our FY00 estimate by $0.50 to $2.30,
to reflect hits to TECD's gross margin. Our sales estimates remain unchanged at $3.75
billion and $15.9 billion for 4Q99 and FY00, respectively. TECD expects to release its
full 4Q results on or about March 30. Obviously this news has had some downward
pressure on the stock over the past few weeks, however, we believe TECD shares,
while weak today, still represent a value to long-term investors. At current levels TECD
shares sell at 1.4x book value and 10x our revised FY00 estimates. We view this "price
war" as a temporary issue and, while the sentiment on TECD shares may be somewhat
negative during the event, once improving signs emerge, TECD shares could resume
their P/E expansion. As such, we reiterate our Strong Buy rating. Tech Data
Corporation will present at the 1999 J.C Bradford & Co. Institutional Equity
Conference>>>>>
I picked up 300 shares so far. If it drops below 18 1/2 I'll
pick up more.
Happy investing!
KZAP |
