Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Applied Micro Circuits Corp (AMCC) -- Ignore unavailable to you. Want to Upgrade?

To: Tech Bull who wrote (290)	1/11/2000 7:32:00 PM
From: SJS	Read Replies (1) \| Respond to of 1805

TB/ALL, Didn't see this here, so I thought it would be worthwhile for it to be posted (Briefing.com source): ____________ Applied Micro Circuits (AMCC) 134 7/8 -10 5/8: This designer and manufacturer of high-performance, high-bandwidth silcon solutions for optical networks reported its fiscal third quarter results after the close yesterday. Judging by the early response, it is reasonable to assume the company missed its target. On the contrary, AMCC didn't miss the mark in any respects as the company posted Q3 earnings of $0.21 per share, three cents above Wall Street views and more than double its yr-ago net. Revenues surged to $45.8 mln, an increase of 70% versus the year-ago period, and up 21% on a sequential basis. The impressive showing was attributed largely to the "significant growth" of its high-bandwidth communications customers such as Nortel Networks (NT). To that end, the company highlighted that it had recently broke ground on another San Diego facility to accomodate the continued expansion and growth of its business. Nevertheless, the response from traders is not what one would expect considering the company exceeded estimates and acknowledged its growth opportunities. To put things in perspective, however, recall that shares of AMCC were up more than 25 points yesterday in anticipation of the news. Moreover, the company had pre-announced a positive earnings surprise on January 3, and prior to that, shares of AMCC had soared 649% in 1999. Of course, one could venture to say that with the yield on the long-bond hitting 6.65%, and some Fed officials urging a tighter monetary policy, AMCC's valuations are being challenged. After all, it does trade at 208x est. FY00 earnings and 140x est. FY01 earnings. That argument, though, hasn't held much sway in the current market environment as high levels of liquidity and theme-based rallies have superseded interest rate concerns. So, the phrases "profit taking" and "selling the news" come to mind when depicting today's action. Given the emphasis on increasing bandwidth to accomodate the functionality of the Internet, it would appear that business for AMCC will remain robust and that its earnings momentum will continue. Accordingly, pullbacks in this highflyer are apt to be viewed by traders as a buying opportunity. The fact that AMCC has strong backing from Wall Street would support this view. Of the 13 analysts covering the stock, 9 have "strong buy" ratings and 4 have "moderate buy" ratings. This morning, Banc of America Securities has reiterated its "strong buy" recommendation while CS First Boston has upped its earnings estimates for FY00 to $0.71 from $0.65 and estimates for FY01 to $1.12 from $1.00. Initial support levels are at 130 and 120 respectively.