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

To: mattie who wrote (2117)	10/28/1997 8:31:00 PM
From: Crossy	Read Replies (1) \| Respond to of 37387

mattie, I look for low PEG. SEG is currently in the red. I did some small FA on Diskdrive plays some days ago. In fact I would sell SEG on strength and change it into something more sound: WDC, QNTM, RDRT, APM. My favourites are RDRT & WDC but this is subjective. Let me dig it up... Date of analysis: October 21st.. Data from sound forcast sources (believe it was Dataquest) STRAIGHT DD MARKET (finished drives) First: current state of affair, 126 million units will be sold 1997. This should amount to a total value of 1997: 126mio units, avg. srp = $200, market = $25.2 Billion $$$ (SRP was my guess) 1996: 105mio units, avg. srp = $220, market = $23.1 Billion $$$ (SRP my estimate) 1995: 84 mio. units, avg. srp = $250, market = $21.0 Billion $$$ (SRP and 25% growth my estimate) Now imagine (have this from marketguide reports) SEG - SEG - SEG - SEG - SEG - SEG- SEG- SEG- SEG -SEG - SEG - 1995: Sales = $7.256 bio., Earnings = $ 1.60 per share, market share in Value terms: 34.5% Earnings Elasticity: Q1/1995 = $1.54 bio revenues / 0.11 EPS Q4/1995 = $2.00 bio. revenues / 0.57 EPS 1996: Sales = $8.588 bio., Earnings = $ 1.03 per share, market share in value terms: 37.1 % Earnings Elasticity: Q4/1996 = $2.02 bio. revenues / 0.46 EPS Q2/1996 = $2.34 bio. revenues / 0.74 EPS 1997: Sales = $8.940 bio., Earnings = $ 2.74 per share, market share in value terms: 35% Earnings Elasticity: Q4/1997 = $1.98 bio revenues / 0.23 EPS Q3/1997 = $2.50 bio. revenues / 1.01 EPS I figure they have market share problems, need to make about $1.95 billion a quarter to cover overheads... (BEP Break Even Point) QNTM - QNTM - QNTM - QNTM - QNTM - QNTM - QNTM - QNTM - 1995: Data other than market share not explanatory due to DEC hdd division takeover 1995: sales = $3.37 bio. market share = 16% 1996: sales = $4.42 bio. market share = 19.1% 1997: sales = $5.32 bio. market share = 21.1% this means: Company is gaining market share first due to acquisitions, now because of capacity increases. This is a healthy sign IMO. Break even point around $1.10 billion sales per quarter (BEP) WDC - WDC - WDC - WDC - WDC - WDC - WDC - WDC - WDC - 1995: sales = $2.13 bio. market share = 10.1%, EPS = 1.28 1996: sales = $2.87 bio. market share = 12.4% EPS = 1.02 1997: sales = $4.18 bio. market share = 16.6% EPS = 2.87 this means: Company is gaining market share due to growth. Seems to be the best play in the pure DD arena. Break even point at $0.60 billion sales per quarter (BEP) Problems of SEG: strategic focus (software division), possibly too eager acquisition record (CNR). My clear favourite: WDC (least BEP), fastest runner (gains market share) HEAD ASSEMBLY & HEAD PLAYS: compared 3 companies: APM, RDRT & HTCH valuation-based: calculated iPE (implied PE) meaning: multiple based on last quarter *4 to arrive at implied annual earnings calculated iPS (implied PtoSales) meaning: multiple based on last 3 quarters + mean of the last 2 to substitute for the missing quarter this year.. Results: APM @ 29.93, iPE = 8.6, iPS = 1.46 RDRT @ 23.63, iPE = 9, iPS = 0.97 HTCH @ 31.06, iPE = 11, iPS = 1.28 my clear favourite: RDRT. Don't forget that APM will have to incur huge capital spending due to the many MR-head projects it is currently into. RDRT is ahead at the learning curve with regard to MR. best wishes CROSSY