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Strategies & Market Trends : Bosco & Crossy's stock picks,talk area -- Ignore unavailable to you. Want to Upgrade?

To: Crossy who wrote (2010)	10/22/1997 6:59:00 AM
From: Iris Shih	Read Replies (1) \| Respond to of 37387

Hi Crossy, Thanks. When doing research on WDC, I found this post interesting. By Michel Murphy: "Intel is very careful and always tells analysts what its customers are telling them," Murphy said. "But what needs to be known is that Intel's customers are changing the model they use in ordering. Many more are following Dell Computer (NASDAQ:DELL) and Compaq's (NYSE:CPQ) lead and following a build-to-suit strategy." Further, according to Murphy, many PC retailers are adopting a "just in time" distribution model to tighten the retail channel such that retailers will re-order PCs as they are sold off the shelves. This reduces the level of inventory exposure. "Also, it gives the PC maker the opportunity to order the specific chips the retail customers want," Murphy said. "If Pentium II machines are popular, they'll order Pentium II chips, etc." Murphy predicts Intel will announce "sometime in November" that its revenue projections will be better than earlier thought. By then, he said, the inventory adjustments will have been absorbed and the underlying strength of the overall PC market will prevail. Murphy believes other chip makers, including Advanced Micro Devices (NYSE:AMD) and Cyrix (NASDAQ:CYRX), "will ship all they can produce because PC makers want alternatives to Intel chips." But production problems remain a hazard for the second-tier chipmakers, he cautioned. Strong quarterly earnings reports from Microsoft (NASDAQ:MSFT) and IBM (NYSE:IBM) came as no surprise to Murphy. "While the summer quarter always has cross currents and is the weakest quarter of the year for techs, it's not surprising that Microsoft and IBM had good earnings. And the fourth quarter will shape up to be strong." Even companies that reported weaker-than-expected earnings, such as LSI Logic (NYSE:LSI), should rebound in the fourth quarter, Murphy said. Murphy doesn't believe the rumored Lucent Technologies (NYSE:LU) acquisition of Ascend Communications (NASDAQ:ASND) will materialize. "Lucent can get most of what it wants by partnering with Ascend," he said. "Also, why would Ascend want to sell out at this price when in six months, with it getting its acquisition of Cascade under its belt and improving business, its stock could be worth 50 percent more?" Overall, Murphy said the strong PC market will lift related industries and suppliers including disk drive makers, semiconductor manufacturers and semiconductor equipment manufacturers "from Applied Materials (NASDAQ:AMAT) on down." Among the companies Murphy anticipates will benefit from a strong PC climate are Seagate (NYSE:SEG), Western Digital (NYSE:WDC), Cirrus Logic (NASDAQ:CRUS), IDT (NASDAQ:IDTC), and Cypress Semiconductor (NYSE:CY). "Mattson Technologies (NASDAQ:MTSN) is our favorite among he semi equipment makers," Murphy added. Crossy, what do you think about lsi? Do you think flat forwarding earning might keep it under water for a whil. Agree with you analysis on WDC. I have RDRT in my IRA account. Should have sold it when it was hovering around 30. Now I have to wait for a while. Michael seems to believe that ASND will rebound in six month. Looking good for asnd? Regards, Iris