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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Suresh who wrote (26034)	4/7/2000 1:33:00 PM
From: Johnny Canuck	Respond to of 68216

I bought a bunch at 72 on Wed. I expected the hype on the wireless optical transmitter to get it heading up considering all the interest in Tetrabeam. I originally though I had missed it at I was trying at 70 1/2 when the market took off. I still expect some more interest in the summer concerning the potential IPO's. Lots of promise no fact right now. The management is Isreali. It must be a cultural thing, but I have found they run public companies like it is their own private companies. The result is they do thing when they are good and ready now when the market would suggest you should traditional do them. I saw this with ORTL and DSPC. Something to keep in mind if you are holding through earnings or across multiple Q;s.

To: Suresh who wrote (26034)	4/16/2000 7:22:00 PM
From: Clint E.	Read Replies (2) \| Respond to of 68216

Hello Suresh. You were correct in what you implied about EMLX. Since I think you're gone to India, this is for you when you come back. Have a good trip and eat lots of delicious Indian meals prepared by Mom (or should I say wife????!!!). ===================================== April 14, 2000 10:59am Emulex tanks, analysts cite market and sales concerns By Tiffany Kary ZDII Emulex (Nasdaq: EMLX) plummeted 45 percent Friday despite topping estimates for the third quarter. Analysts blamed the dip on the markets, and slowing growth in the company's fibre channel business. Shares in the supplier of network access products, printer servers and fibre channel adapters were down 37 7/16 to 45 1/2. Emulex has surged since announcing a 2-for-1 stock split in November. "Obviously a large part of this is the market," said William Lewis, who covers the stock for Chase H&Q. "A lot of high valuation stocks are coming down, especially those that have had steep runs." Shares have climbed to a dizzying high of 225 1/2 from a low of 9 5/16 earlier in the year. Lewis said that though the company beat estimates, investors may have expected more upside. Emulex said Thursday that third quarter net income was 20 cents per share, well above First Call's consensus of seven analysts which predicted a profit of 18 cents a share. Third quarter revenue doubled year-over-year to $36.5 million from $18.2 million. But those results weren't enough to please Wall Street. "It's more than just the market," said Glenn Hanus, an analyst with Needham & Co. "People get used to analysts raising estimates after every quarter." Hanus raised estimates slightly, putting fiscal year 2000 expectations at 71 cents a share, up from 68 cents a share. Hanus didn't put a price target on the stock, considering the volatile market conditions. In a report for U.S. Bancorp Piper Jaffray, analyst Paul Mansky wrote that while the company's top line came in about $1.5 million better than the investment firm's $36 million estimate, fibre channel sales grew a scant 9 percent sequentially, versus 31 percent in the prior period. Although the company should see success in penetrating new business, he said upside may be limited as the majority of the market is dominated by Sun Microsystem (Nasdaq: SUNW) and JNI (Nasdaq: JNIC). "Although the stock has lost in excess of 60 percent of its capitalization since March 27, we believe the negative money flow has yet to subside. We would again look to be acquirers as the stock encroaches on the $65 range," Mansky said. ================== 15:32 ET ****** Emulex (EMLX) 46 1/2 -36 7/16: 100% y/y revenue growth to $36.5 mln; EPS of $0.20, two cents better than consensus estimates; gross margins up 90bp; sign Hewlett-Packard (HWP) as a new OEM account...great quarter, shareholders should be pleased right? Not exactly. Emulex shares are off 45% on the day after releasing the preceding Q3 results. The problem? Investors wanted more. More upside to revenues and a stronger bottom line. Emulex makes network access products, printer servers, fibre channel host adapters, hubs and software products for access to and storage of electronic data and applications. Their fibre channel business accounts for 85% of total sales, and the 10% q/q sales growth for the division did not compare favorably to last quarter's 31% sequential jump. In fact, overall sales growth slowed from the 30% neighborhood (on a sequential basis) the previous two quarters to 9% in Q3. 9% q/q growth is nothing to sneeze at, but when the bar is set at 30%, eventually you're not going clear it; that's just part of the maturation process. Furthermore, most Street analysts were expecting $34-36 mln in revenues, and Emulex topped them. Certainly exogenous variables such as today's CPI release and overall market sentiment are playing a part in todays plummet, but the slowdown in Fibre Channel sales also accounts for a large part of today's action. It should be pointed out that the company is ramping their fibre channel production capacity to meet strong demand, and they are the market leader in the space. Moreover, order backlog in Q3 came in around $27 mln, about 22% higher than last quarter. The story here is a familiar one, and you'll be hearing of many more cases like Emulex. Impatient shareholders have come to expect the steep revenue growth curve of an immature, developing company, when the growth rate starts to flatten as it inevitably will, sellers hit the panic button. Look for Emulex to bounce back after the momentum crowd that pushed EMLX shares to the $225 level in March clears out. - MG