Disk Drive Sector Discussion Forum Message Board

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Technology Stocks : Disk Drive Sector Discussion Forum

WDC 140.23

-8.9%

Nov 20 3:59 PM EST

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To: jfrancis who wrote (6020)	4/6/1999 12:06:00 AM
From: Mark Oliver	Read Replies (2) of 9256

<It is hard to know what a conservative fair value should be on htch. I used to think this stock in a year or so would be over $100 given it's earnings and growth rate. Now I'm just not sure how to evaluate it. Has the story changed that much? At this point, what do you think it's earnings and growth rate will be next year? > It's a funny story how people make a rule like "growth is 20%, so I'll look for 20 PE and make a price target". It makes some sense in a way, but then the market is not so kind as to always agree. My general feeling is the disk drive sector has a history of disappointing. There seems to be no way to look further than 6 months out and make any responsible guess on earnings. This makes for some wild investing and one should see that as soon as everyone thinks things are really going well, it's time to sell. The other side is buy when people think things can't get any worse. Whatever, don't be too greedy and don't buy and hold for the long term. I'm glad to hear you didn't buy the top. It's hard to see great gains evaporate, but I think you've been wise to hold. I think we'll be rewarded. Can't guess when, but it looks like the basic story for Hutch is a good one that will eventually pull us through. Your rules for 20% growth may apply to companies that have a history of meeting estimates, strong growth stories, and liquidity to provide an escape when things do go wrong. Little companies like Hutchinson don't fit that bill. Regards, Mark

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