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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: Techplayer who wrote (28417)	2/23/2003 2:13:16 PM
From: Techplayer	Read Replies (1) \| Respond to of 57110

Sunday's In Play 12:47 ET QLogic is subject of negative NY Times story (QLGC) 35.68: Article identifies several risks to the QLogic story, including competition from a new generation of technology. "They'll have to try to compete against the Intels and the Broadcoms of the world, and they don't have a prayer," says USB Piper Jaffray analyst Ashok Kumar. "It's a disaster waiting to happen." According to article, QLGC also faces the risk that one of its largest customers (Fujitsu) will exit the disk-drive biz. "You have technology transition risk, and you have customer risk," Kumar said. "These are clear and present dangers." (Briefing.com note: As a point of reference, Kumar downgraded QLGC to Underperform Jan 16 and placed a $20 target on the name; stock was trading just above $40 at the time). 12:27 ET General Electric "has been humbled, but its prospects still are bright" -- Barron's cover story (GE) 23.80: Article speculates that the prevailing pessimism in the markets "has created a potential opportunity for investors." The basis of this argument is stock's multiple of 15.5x trailing earnings, which is an 11% discount to the S&P 500 multiple and also a steep discount to industrial names such as MMM and HON. One money manger who owns the stock thinks GE could hit $30 in the next yr or so as its P/E returns to more normal levels. However, critics counter that GE should trade at a discount to other industrial conglomerates because, on average, co will derive 40% -45% of its earnings from its GE Capital Services unit (investors typically grant finance companies multiples in the 9-12x range due to their greater leverage and higher risk profile). 12:24 ET Barron's interviews Raj Gupta, whose $500 mln fund has delivered an avg of 19% since 1997 : Mr Gupta is short the dollar, bullish on bonds, and thinks the evidence suggests that housing prices are due for a decline. With respect to housing, one of the issues he cites it the gap between cost of homeownership and renting; says this gap is largest since1975 and one of largest ever. Gupta questions the valuation of SCH and thinks consumer finance names COF and KRB have substantial room for further downside. Thinks that with the refinancing boom over home retailers such as HD, LOW, WSM are at risk. Also thinks WMT is extremely vulnerable at 27x earnings; thinks earnings holding up well so far b/c co is able to offset slower revs with cost-cutting. "But if the consumer starts to weaken, that game doesn't work." 12:22 ET Intuit: Stock may still be a buy despite valuation -- Barron's (INTU) 45.21: Barron's article focuses on INTU's push into the small-business market. Article reads more as an overview that really doesn't make the case for owning INTU other than a Jefferies analyst suggesting that INTU typically issues conservative guidance, and that the stock has done well since Barron's last wrote about it in 1997. 12:21 ET Sun Microsystems could pop to $4; HPQ likely to beat this week -- Barron's (SUNW) 3.41: A Bernstein analyst interviewed by Barron's thinks "Sun's shares could sneak up on money managers and analysts who will be attending the company's annual analyst summit in San Francisco this week and flirt with four buck a share." He is also predicting that HPQ is likely to beat by a penny (on in-line revs) when they report Tuesday.