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Technology Stocks : Hutchinson Technology, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: All Mtn Ski who wrote (1374)	11/17/1999 12:57:00 PM
From: Marconi	Read Replies (3) \| Respond to of 1487

Hello Mr. Toxby: Around book was a fair low approximation in years past since public in the mid 80's. Some issues: High growth (~30% per year) covers many sins of management--assuming several quarters of moderate demand of say ~10% for example, it would be a test of management for a first time in a long time--I cannot remember such an episode in the past--to see whether they can right the ship and maintain a profitable footing for the long term, and continue business development more prudently. This is assuming a scenario to make the point, not a prediction. The 'hot' network appliance market--does it and will it consume more HDD's--like IBM's tiny HDD's? Recent forecasts are arguing that appliances will impact PC's as a friendlier alternative for the average US consumer through 2003 or so as a remarkable growth segment. Repeating a concern of mine this last year--has Hutchinson management learned to manage TSA's profitably or are they getting whipsawed in the market by the greater complexity of TSA over conventional suspensions? Back to the issue of tooling, more layers of processing steps, and if Hutchinson is a 'tweaker' for operations, then that telescopes into impacted earnings if supply demand is not in synch, as well as obsolescence of tooling issues, where high capex is footed. In the past, the best times to buy HTCH were when things looked bleak, black, and hopeless, as if they were not far away from going out of business. With cash in hand for the next couple quarters. The current environment is not anywhere near dire enough to buy based on that speculation. And that speculative positioning in the past would have returned spectacular profits within 2 to 3 years at most, and outstanding profits nearly always within the following year. This leads me to a final point. If PC demand tapers, but appliance demand adds a new dimension to consumption of information, IF both use HDD's in the long run, then there is hefty growth to be realized in the future of HDD's as in the past. Tough to call a turn toward that scenario without a better grasp of appliances. Storage is inevitably a cheap solution to doing a lot more with a digital device. If the devices are out there, the storage will follow. WHEN? is the $64 question. Other than a minor speculative position in call options, I am out of HTCH at this time. It got below my previous thought of 24--and much more quickly and further than I thought the drop would be when it came. If it spikes down anomalously low for a few hours in one day, that may be a fair entry point both for short and longer term holdings. A cessation of firing employees to 'make money' needs to occur--otherwise it is a sign to me of poor management, and cannot be doing productivity any good as long as that process is a threat to employees. As long as that process has been underway the better part of a year, there must be some departures of significant employees going on, and the placeholding graspers will be holding on any way they can. All too often, that's a rotten management task to sort through adequately, and is usually done inadequately in most firms. Best regards, m