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Strategies & Market Trends : Pump's daily trading recs, emphasis on short selling -- Ignore unavailable to you. Want to Upgrade?

To: Graeme Smith who wrote (5061)	8/7/2001 11:34:16 AM
From: XBrit	Read Replies (1) \| Respond to of 6873

I'm not trading AVNT because there's still some possibility that Cadence will try to use the restitution award to force them into Chapter 11. Even if CDN tries this, it's not clear whether they could succeed. Depends on whether anyone will lend money to AVNT at short notice, and if not, on whether the trial judge will impose merciful payment terms despite CDN. Right now I think the probability of near-term Chapter 11 has receded to under 5%, so if you're comfortable with that level of risk you might consider them as a value long. Of course, everything I've said is known to the market and fading of the Chapter 11 fears are the main reason (IMO) for the stock's rebound the past few days. Longer-term (6-18 months) there is a civil trial on the trade secrets issue, and there is a crucial Appeals Court ruling coming up which would make a huge difference to the severity of the civil suit. Until those issues are resolved it's very unlikely AVNT will trade anywhere near a market multiple for the EDA sector. However, a return to the low end of the previous trading range of $12-20 is very possible. Competitor stocks are CDN, SNPS, MENT, NMTC, SPLX.