Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Z Best Place to Talk Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Joe Stocks who wrote (39738)	5/20/2002 8:53:22 PM
From: Larry S.	Read Replies (1) \| Respond to of 53068

my worst case scenario on GLW is 3.50. I don't really think it will go below $5. But let me tell you what is happening in the Corning community. Since they announced an additional 4,000 jobs company wide (1,000 in the Corning area), morale is zilch, people are walking around waiting for the ax to fall. there is not much work, and people aren't even doing what there is. there is a school board election tomorrow 5/21 and the big issue is whether the planned new high school, for which GLW will foot the bill for $65 million over the next 20-30 years is much in contention. it was passed a year ago, but new folks running for the school board want to overturn the new school referendum. part of the reasoning for the new school was the continued growth in the area base on GLW's growth. well, that was last years, or two years ago story. Now GLW is cutting back big time, but has stayed committed to the new school and its funding. Many feel that GLW has held off on the latest round of layoffs until after the school board election. so do i. OTOH, the current leadership of GLW will do what is necessary to get the company back on its feet and cash flow positive. there are healthy business, flat-screen and substratres (catalytic converter components) - and Jamie Houghton, the old and new CEO, has affirmed there are many powerful projects in the works, and not just in fiber optics or photonics. the timing of GLW's return is certainly questionable, but, when,- when, not if, there is an announcement of some brightness in the fibre sector, this stock will take off. till then....... larry

To: Joe Stocks who wrote (39738)	5/21/2002 2:35:32 AM
From: DanZ	Read Replies (2) \| Respond to of 53068

Granted, Corning closed today at its lowest price since April 1989. However, today's intraday low did not exceed the intraday low of 5.90 which occurred as recently as 5/13/02. There are several intraday lows between 5.90 and 6.30 since February, and today's range did not violate that. One trade printed at 5.80 today, but it was only 3,000 shares on the Third market and was flagged as an irregular trade. The bid at the time was 6.07, and the low trade today was 5.99, which occurred in the last minute of trading on a measly 15,700 shares (6 trades). You opined that the stock closed weak on heavy volume. I beg to differ. Most of the trades at $6 in the last few minutes were less than 1000 shares, and many of them were even as small as 100 shares. The preponderance of today's volume occurred between 6.07 and 6.13, and the stock traded fairly well most of the day considering how weak the market was. Corning is in an out of favor sector, had a huge loss last year, albeit primarily due to a large write-off in the June quarter, slightly declining sales, and a cut in their dividend. However, the stock appears to be reasonably priced at 1.1 x trailing sales, 1.2 x book, and a 3.2% dividend yield even after the 50% cut this year. Though they have about $2.00 per share in cash, on the negative side, they have about $4.4 billion in long term debt. Also, in the March 02 quarter, their EBITDA was negative, and they could have a problem with interest payments if the losses continue for a sustained period. However, they have plenty of cash relative to their interest payments, and a negative EBITDA is not the norm for this company. It is a result of significantly lower sales due to a decline in the economy rather than competitive factors, and this temporary problem will vanish with a better economy. The bottom line is that Corning, much like Oracle, is well positioned to capitalize on a rebound in the economy. Their three primary business sectors should be in high demand during better economic periods, and there are signs that the economy is bottoming. This appears to be the major point of contention between us. I think that Corning is an excellent long term buy in the 6 area. However, because I don't expect the stock to rebound significantly in the short term and wouldn't dare say that it won't trade lower, I think that it is prudent to trade around a core position when given short term profits. The same goes for ORCL. By the way, I did add to my GLW position today. Dan