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

To: cfoe who wrote (260)	12/21/2000 4:12:04 PM
From: UUplink	Respond to of 285

(deleted) Posted comment on wrong thread. Oops.

To: cfoe who wrote (260)	12/22/2000 10:24:27 AM
From: Capitalist	Read Replies (1) \| Respond to of 285

Insiders Dumping Shares: Insiders at the company have been dumping the stock for the past few months. They have been selling the shares in high volume, sometimes 100,000 shares at a time. There have been virtually no insider Buys versus an avalanche of insider sales. Some recent notable sales include 130,000 shares by a Vice President in early November, and a 100,000 share sale by a director in October. Take our word, the list is long. The only recent purchase we can find is a 600 share purchase by a director in late November. Stephens Group Selling: For example, consider Stephens Group, one of the purchasers of Power-One from the previous owners in 1995. They took the company public in 1997. Being a large shareholder and having a seat on the Board of Directors, the company is still very familiar with the company. Consider this: Power-One's 10-K listed their ownership at 23.4% in late March. Based on a recent Form 4 filing, we now calculate their ownership at around 9%. Furthermore, in November they sold 418,000 shares and in October they sold at least 414,000 shares. How many buys? Zero. When One Is Sick, It's A Matter of Time Until the Other Sneezes: One concern about PWER is that a competitor, Artesyn Technologies (ATSN 15), warned just four days ago. ATSN lowered expectations not only for Q4, but cautioned of problems ahead for the first half of next year. The shortfall was blamed on undelivered critical components and product shipments delayed by customers. The stock traded down 37% that day. Cisco's Woes: Simply put, demand from Cisco (CSCO) has slowed considerably. Cisco is a huge customer for PWER, roughly 18%-20% of sales. Cisco is also a major customer for ATSN and was the central reason for their shortfall and cautions going forward. Inventories Bulging: Power-One is showing symptoms similar to ATSN as inventories are growing considerably faster than sales. As of Sep 30, inventories for PWER were $153.2 million, up a staggering 216% yoy while sales grew 107%. For ATSN, inventories grew 48% as sales grew only 19%. Accounts Receivables Increasing: When accounts receivable balloon, it indicates the company is likely having trouble collecting payments from its customers. A/R's are growing faster than sales at PWER. As of Sep 30, A/R's grew 144% vs 107% for sales. For ATSN, A/R's grew twice as fast at 38% on 19% sales growth. Also, Days Sales Outstanding (A/R / (sales / # days in reporting period)) have increased to 68.9 in SepQ00 for PWER, up from 58.1 in SepQ99. ATSN also suffered as SepQ00 was 62.3, up from 53.9 in the year earlier period. From: Briefing.com

To: cfoe who wrote (260)	12/22/2000 1:11:31 PM
From: Capitalist	Respond to of 285

Sorry, when I posted this...I was out of time. Most of these issues were brought up by briefing.com, but its a paysite, so you wouldn't be able to access it. But let me elaborate on them. 1) In Artesyn Technologies warning they lowered expectations for Q4, and cautioned of problems ahead for the first half of next year. The shortfall was blamed on undelivered critical components and product shipments delayed by customers. It is plausible that PWER could be taking some market share away...but it seems more an issue of lowered overall demand, which would coincide with the lower capex spending from carriers currently effecting the Telco equipment makers. 2) The Insider selling has been SIGNIFICANT (sorry for the typo). Stephens Group (who helped take the company public in 1997) has lowered their stake from 23.4% in late march, to now around 9%. That's some serious selling for one of the main founding investors. Also, execs have been selling like crazy, even with some large several hundred thousand share blocks pretty recently...check Yahoo! Finance if you don't believe me :). biz.yahoo.com 3) Power-One is showing symptoms similar to ATSN as inventories are growing considerably faster than sales. As of Sep 30, inventories for PWER were $153.2 million, up a staggering 216% yoy while sales grew 107%. For ATSN, inventories grew 48% as sales grew only 19%. Check out their filings... 4) When A/R increases that fast...it usually means trouble as they aren't collecting payments from customers. As such, DSO's grew to 68.9 up from 58.1 the previous year. 5) Finally, Cisco is a major customer for both Artesyn and PWER. And Artesyn cited a slowdown for orders from Cisco as one of the major reasons for their shortfall and cautiousness going forward. Don't mean to be so negative...but just thought Id bring these issues up. For disclosure...I sold my remaining stake in PWER, and have started a short position.