Thanks Harry. I own 2000 shares ESST long. Briefing.com news:
8:25AM ESS Tech may increase outlook again (ESST) 19.65: CEO Robert Blair tells Dow Jones Newswires that co now expects Q1 revenues in excess of $75 mln, and that ESST plans to raise its EPS target. This would be ESST's second time increasing guidance in less than a month. On Feb. 28, co boosted its Q1 rev outlook to $68-$70 mln from consensus of $58.78 mln and lifted EPS outlook to $0.22-$0.25 from consensus of $0.12.
7:45AM Micron, Intel could place orders in next few months-- Pru : Prudential says that field checks lead them to believe that MU and INTC may place incremental orders over the next few months; these potential orders, along with activity coming from leading wafer foundries and DRAM manufacturers, suggests semi equipment co's could see strong double-digit order growth QoQ in the June qtr. Primary beneficiaries under coverage include AMAT, NVLS, KLAC, LRCX, and RTEC.
7:35AM Agilent Tech could hit $50 in 12 months-- Morgan Stanley (A) 33.39: Morgan Stanley believes that A could be a $50 stock within 12 months, based on: 1) underappreciated post-restructuring earnings power, 2) cash flow growth acceleration opportunity, 3) new product cycle could lead to above-mkt revenue growth, and 4) evidence of further restructuring benefits will drive stock higher. Raises price target to $42 from $37.
7:34AM Applied Materials downgraded by GKM on valuation (AMAT) 51.28: Gerard Klauer Mattison downgrades to NEUTRAL from Buy as share price approaches firm's $55 price target.
7:27AM Intersil upped to Strong Buy at DBAB (ISIL) 26.65: A day after UBS Warburg downgrades stock to Hold (resulting in a 10% decline), DB Alex. Brown is upgrading to STRONG BUY from Buy. Following sell-off, firm believes ISIL offers exceptional value with a compelling valuation relative to its peers.
Yesterday
Xicor (XICO) 9.26 +0.01: Soundview is downgrading XICO to HOLD from Buy, saying that 2002 will be a rebuilding year and product and rev traction will not occur until 2003; firm says that money would be better put to work in co's that are gaining traction in 2002.
Entegris (ENTG) 15.51 +0.50: After close, company reports Q2 net loss of $0.02 per share, $0.02 better than the consensus estimate; Q2 revenues came in at $50.7 million versus the consensus estimate of $45.9 million; cash, cash equivalents and short-term investments at the end of Q2 totaled $107 million; sees Q3 sales 10% above Q2 levels and expects to be profitable in Q3; these numbers compare favorable with current consensus estimates for revenues of 53.5 million a net loss of $0.01 per share.
4:14PM Solectron to support Microsoft's Xbox (SLR) 7.41 -0.59: Company announces its Global Services business unit will provide after-sales service and support for the Microsoft Xbox video game console in Japan and Australia. Financial terms of the three-year agreement were not disclosed.
11:21AM Intel chip selected by Fujitsu for broadband network (INTC) 30.10 -0.49: -- Update -- Fujitsu selects an Intel Media Switch chip as the foundation for its newest broadband metropolitan-area-network IP switch.
12:03PM Telecom Equipment : Bernstein's Paul Sagawa gained recognition for being early on going bearish on the telecom equipment sector downturn. He cautioned of lower capital spending and a glut of capacity. The stocks are not reacting to his bullish call this morning. Sagawa says that carrier capex will increase in 2H02, with Q2 a significant inflection point in this cyclical industry. He prefers Lucent (LU 4.63 +0.04) given its strong exposure to the healthiest carriers. Nortel (00 4.45 -0.05) may take longer to recover given its IXC exposure. Also, Cisco (CSCO 16.72 +0.15) is much more levered to corporate IT spending, which may get worse before it gets better. With so many carriers recently lowering cap-ex spending expectations, including Verizon last week, this is a contrarian call. Given strong and increasing cash flow by incumbent carriers, historically low spending levels and deteriorating network performance, Sagawa expects cap-ex to follow the traditional back-half loaded seasonal pattern in 2002 and to grow 3-5% in 2003....Briefing.com expects the stocks to be in hibernation for a while. Keys to picking within the sector are solid balance sheets and customers with financial strength. As much bad news as we have heard about Lucent, it managed to keep exposure to the start-up carriers lower than many. The start-ups had to rely on debt and equity financing to buy network equipment. However, the incumbents have never been in financial trouble as their voice businesses have always been cash cows. In that respect, we agree that Lucent makes more sense than Nortel down here. Lucent's main problem is its balance sheet and its repeated trips to equity and debt markets, diluting shareholder value. 3Com (COMS 5.57 +0.13) is a good example of a solid balance sheet with cash/inv approaching $4 per share. -- Robert J. Reid, Briefing.com
10:18AM Technical Levels : The Nasdaq has been in a holding pattern for nearly two weeks now. Over the prior nine trading sessions, the index has traded within a reasonably tight trading range of 73 points. It's also worth mentioning that last week's activity encompassed five of the ten lightest volume sessions of the year. So we have a general lack of commitment at this point which typically favors a move in the direction of the longer-term trend. While the daily chart on the Nasdaq is less than clear, the index' weekly chart looks as if it may be well positioned for a solid move higher. In either event, the following levels are the ones we find notable regardless of which direction the index heads near term. To the downside, we continue to view the 1850/1854 area as significant. This area represents chart congestion going back as far as November and has also served as a notable pivot point in the recent past. If 1850 should fail, look for subsequent support at 1832/1835 which represents the open/close low point of the prior leg lower. After that, we continue to eye support at 1800 as the most likely target on an intermediate-term basis. To the upside, the very near-term key will be the 1868/1873 area. This brackets the index' 50-day simple moving average and its 20-week exponential moving average -- it also happens to approximate notable recent congestion. After that, look for more significant overhead at 1888/1895 which brackets the index' 200 and 100-day simple moving averages. Note that 1891/1893 is the area at which the prior leg higher topped out. In the attached table, we touch on several individual issues in addition to key levels on which traders will focus. -- Mike Ashbaugh, Briefing.com
2:44PM United Micro (UMC) 9.55 +0.02: Stock climbing higher despite negative mood of mkt on bullish comments out of Goldman; firm looks for very strong momentum to build at UMC in Q2 and believes this should be reflected in a large q/q increase in volume that could be well over 30%. Believes XLNX is looking to aggressively drive 300 mm capacity; a report in 'Digitimes' said the co. aims to have 40% of its production from UMC's 300 mm fabs by Q2 2003. Notes that UMC has indicated it continues to see very strong demand with some fabs running at over 140% capacity.
2:00PM Nokia (NOK) 20.99 -0.02: Unlike its competitor MOT (13.52 +0.09), shares of NOK are trading slightly lower intraday on a report out of WR Hambrecht this morning. Firm remains "very cautious" citing that they do not believe NOK will have a significant number of color handsets on the mkt during 2002; firm believes color displays have the best near-term opportunity to spur replacement sales. Firm continues to expect NOK to post 2002 handset revenue growth of 6%, well below guidance of 15% growth. MOT shares recovering some losses from last week; Soundview is slightly more positive on MOT based on solid handset introductions coming mid-year, but still not enough to buy the stock in front of the Q1 report in early April.
1:27PM Taiwan Semi (TSM) 19.57 +0.01: Stock holding up well amid sector sell-off today. Positive comments out of Goldman Sachs contribute to shares positive position: firm raises their 2002 EPS est by 3% following channel check that show TSM continues to see stable business volumes. Goldman expects a ramp in new IDM orders throughout 2002 on their belief lead times have lengthened (an indication of tightness) and plans for capacity additions have improved; reiterates their Recommended List rating
General Commentary
Briefing.com contends that these four factors worked against the market on Monday:
Fear of rising rates... Strong Existing Home Sales report only added to market anxieties.
Earnings concerns... It's preannouncement season and investors have been conditioned over the past several quarters to expect bad news prior to, and during, earnings season... Consequently, traders predisposed to focus on the negatives over the positives... For example, reduced estimates on EMC (EMC) carried more weight in the storage group yesterday than news that Brocade (BRCD) expects to meet or exceed Q2 estimates amid improved visibility... One look at Briefing.com's guidance page reveals that through yesterday ratio of negative to positive Q1 preannouncements was 1.3 to 1 - a huge improvement over the 3.5 to 1 average of the past four quarters.
Technical Damage: While there have been several encouraging technical developments over the past several weeks (some of which were profiled on this page yesterday), traders were disappointed by a couple of events in Monday's trading... In particular, S&P 500 broke back below its 200-day moving average (1144); SOX index failed at 600 area once again and closed at its lows of the day and its lowest level since early March; similarly, Nasdaq Composite was stymied by its 200-day moving average and proceeded to fall to its lowest level since 3/4... Should note that while these events deserve attention, indices have yet to take out key retracement supports... In other words it's too early to label pullback anything more than corrective.
Low Volume... Monday was the lowest volume day of the year... Lack of activity makes it difficult to assign much significance to the day's action... However, given the religious holidays this week, volume is apt to remain light... As a result, trading could be more volatile than normal - especially given options expirations.
Don't look for an immediate recovery - at least not if historical patterns hold up... According to Yale Hirsch's Stock Trader's Almanac the last three trading days have been net losers in eight of the last nine years.
Robert Walberg, Briefing.com |
