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Technology Stocks : Power-One (PWER) -- Ignore unavailable to you. Want to Upgrade?

To: jhg_in_kc who wrote (171)	7/18/2000 8:54:53 PM
From: stock bull	Read Replies (2) \| Respond to of 285

Hi JHG, Pwer reports on July 27, before the market opens. First Call has the estimate at 25 cents. I think P1 will beat this by 3 to 5 cents...just a guess on my part. My concern centers around the material costs. Due to the component shortages, I believe P1 had to pay premium prices. They were able to only pass on a percentage of these costs to their customers. The rest was absorbed by the company. Not sure how this will impact the financials. I have seen the Glider/Huber reports and their focus on clean and reliable power. Quite frankly, there really isn't anything new in these requirements. The requirements for reliability are always go up. Failures are now measured in PPM (Parts Per Million). Yes, P1 held up very nicely today. However, I can't help but wonder when we are going to see a meaningful correction in the stock's price. It can't keep going up forever, or can it? <ggg> Stock Bull

To: jhg_in_kc who wrote (171)	7/18/2000 9:23:12 PM
From: powerchip	Respond to of 285

Power One has a strong foothold in their market, here's an interesting post I found on the Yahoo board. Power-One (PWER) is prospering despite a division of 200-billion dollar competitor Lucent??s (LU) attempts to aggressively enter the power supply market. However, Lucent has little chance of selling its power supplies to competing original equipment manufacturers (OEMs) such as Cisco (CSCO) or Nortel Networks (NT). These two companies, together with dozens of others, have become a goldmine for Power-One as they reduce costs and improve reliability by consolidating their purchasing of power supplies from the thousands of existing power supply companies to one??Power-one. Sales at Power-One??s other other major competitors??Astec Industries (ASTE), Artesyn Technologies (ATSN), and Vicor (VICR)??are already suffering as Power-One is becoming the company of choice for major OEMs across the globe. Artesyn, with a market capitalization of a little over 900 million, increased revenues by 18% over the year ago quarter. Earnings estimates are up only marginally for the next two years. Asctec (market capitalization 500 million), is faring worse. Estimates have fallen several cents per share for the next two years. Astec also missed last quarter??s estimates, though growth does remain higher, at 25%. Vicor grew revenues by 38%, and estimates are pretty much flat. They missed estimates two quarters ago. Power-One, fat with a 3.2 billion dollar Market capitalization, produced revenue growth of 98% over the year ago quarter. Estimates have soared 9% for this year and 30% for 2001. This rapid growth is fueled largely by their aggressive expansion through acquisitions of smaller power supply manufacturers. These companies are trading at a lower price over revenue multiple, compared to Power-One, due to smaller production capability and slimmer gross profit margins. At the moment, Power-One is concentrating on acquiring companies that make power supplies for OEMs. Their business will firm up Power-One??s already high profit margins. What could be more seductive than high profit margins, a tremendous growth rate, and dwindling competition? How about the addition of high switching costs; OEMs often order specifically tailored power supplies, and this requires a large up-front payment to pay for research and development, as well as a few months of waiting. This is a great barrier to entry for upstart companies that might want to displace Power-One in the future. Unless the new company has a vastly superior product, why would any OEM want to switch providing companies if it means a long wait and an unnecessary investment? Power-One??s stock chart is just as impressive as its fundamentals. In the past six months the stock has risen from 30 to close at 95 (June 19), and it has yet to break its uptrend. Even when the Nasdaq tumbled it rose steadily. On June 16th, the stock broke above the top range of its oscillating uptrend with four times normal volume, after being overbought since the beginning of June (according to the daily slow stochastic). [Stochastics are oscillating indications of where a stock is trading in comparison to the stock??s recent range.]