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Technology Stocks : PMC-Sierra (PMCS) - moderated -- Ignore unavailable to you. Want to Upgrade?

To: Kayaker who wrote (26)	10/10/2000 2:32:19 PM
From: John Carragher	Respond to of 469

Dow Jones Newswires -- October 10, 2000 Dow Jones Newswires PMC-Sierra On Solid Ground Despite Peer Downgrades By STUART WEINBERG Of DOW JONES NEWSWIRES TORONTO -- PMC-Sierra Inc. (PMCS) is doing just fine, analysts say, although its stock is lower Tuesday after the ratings of two prominent semiconductor companies were cut. Bear Stearns analyst Charles Boucher said he expects PMC-Sierra to exceed third-quarter expectations. "More importantly," he added. "we expect to hear the company give bullish guidance on Q4 as well. I don't think there's any weakness in their market at this point, and I think the weakness in the stock is unjustified." As reported, analysts from Lehman Brothers and Salomon Smith Barney downgraded their ratings for Xilinx Inc. (XLNX) and Altera Corp. (ALTR) Tuesday. Salomon analyst Clark Westmont cut both companies to "outperform" from "buy," citing "continued deterioration in the environment for general purpose semiconductor chips," while Lehman analyst Daniel Niles cut the companies to "neutral" from "outperform" because revenue growth rates for the next two quarters are likely to slow "noticeably." The downgrades have sparked a sell-off in the communications semiconductor sector. As a result, PMC-Sierra is down about 11% to 169 1/2 on Nasdaq, on about 8.9 million shares. "I don't think it's anything specific to PMC," UBS Warburg analyst Gregory Mischou told Dow Jones. "I think they're just trading down in sympathy." Mischou said he is forecasting third-quarter revenues of $153.9 million and net of 25 cents a share for PMC-Sierra, which is scheduled to release its results on Thursday. A First Call/Thomson Financial poll of 24 analysts is projecting net of 26 cents a share. BMO Nesbitt analyst Brian Piccioni said PMC-Sierra has performed extremely well and that most people expect that to continue. "Their dollar sales per switch can continue to grow for some time," he said. Piccioni is forecasting net of 25 cents a share in the third quarter on revenues of $151 million. Company Web site - pmc-sierra.com -Stuart Weinberg, Dow Jones Newswires; 416-306-2026; stuart.weinberg@dowjones.com

To: Kayaker who wrote (26)	10/11/2000 9:02:46 AM
From: Eric L	Read Replies (1) \| Respond to of 469

Re: A very Bearish Viewpoint with PMCS mention (Note: I'm a LTB&H type and decidely unbearish in my outlook on both the market and PMCS) Below is an excerpt from a 10/11/00 article called *Bear With Me: Confessions And Cautions* by Jon D. Markman: moneycentral.msn.com >> Grrrrr. Now I’ve run out of numbers, but not confessions. Here’s one more: I haven’t interviewed enough bears this year, and they’re complaining of discrimination. So in the interest of balance, I called up Richard Rhodes, a veteran private trader in Chicago who has expressed a negative view of U.S. equities since mid-March with wit, intelligence and charts in a Stockcharts.com column. Rhodes confounds the popular impression of bears as villainous cads. Scholarly and temperate, he starts with a fixed fundamental view of the worldwide macroeconomic trend (interest rates plus currencies plus the business cycle plus politics) before initiating any positions. These trends, once manifested, tend to last many years, he says. This is where the real money is made. Rhodes says he trades only when his fundamental and technical views of the market are in tandem, and right now they’re both bearish. He’s forecasting that the Nasdaq will sink to 2,800 by the end of October -- and then, potentially, worsen. The problems he sees: Slowing revenue forecasts from all sectors of the economy, higher oil prices (a tax of the highest magnitude) and a weaker euro have not yet been fully factored into stock prices. He foresees inevitable rallies that will repeatedly fail, declaring: "The bear market in the Nasdaq isn’t going to be a straight-down affair. It’s going to suck people in and continually break them down. And it will go on and on until it’s finished." Rhodes says he would avoid everything at this point, and get long cash. *For those who wish to make money on the short side, he recommends sales of* Anheuser-Busch (BUD), Ciena (CIEN), *PMC Sierra (PMCS)* and Sun Microsystems (SUNW). The best time to initiate these positions, he said, would be prior to their earnings reports. The reason: In a bear market, all news will be considered negatively. The trader says he won’t believe the trend has shifted until the Federal Reserve both lowers interest rates and enough time has passed for those cuts to filter through the economy. In addition, he said he’d have to see stocks become considered an unfavorable asset class. People are still jumping on every rally as if it’s the one that’ll take them higher, and they’re going to be wrong every time as long as the big trend stays down, he says. For those who wish to trade against him, Rhodes suggests that they at least develop and follow a strong risk-management program to take them out of bad positions quickly. The important thing is not just saving financial capital to spend another day, but to reserve your mental capital as well -- you need to keep your mind clear and confidence high, he said. He suggested that if you make 100 trades a year, expect only 40 to be correct -- and just three or four to butter your bread. Other recommendations to maximize results: Don’t put more than 10% of your capital into any one trade to start, and never, ever add to an unprofitable trade. To make the most of your best ideas, he suggests a staged approach -- putting in no more than half as much money as you’ve already committed with each augmentation. Average into good trades, not bad ones, he cautioned. To sum up, Rhodes suggests investors not turn a blind eye to risks in the market because higher interest rates beget slowing revenue growth, which leads to lower profit margins, thus squeezing earnings forecasts. Not a pretty picture when you consider that rising earnings were behind the price/earnings multiple expansion of recent years -- and a good reason to exercise caution. << - Eric -