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.

Technology Stocks : Seagate Technology -- Ignore unavailable to you. Want to Upgrade?

To: uu who wrote (4183)	11/20/1997 11:55:00 AM
From: jelrod3	Respond to of 7841

Addi, I'm thinking about doing some bottom fishing in the DD sector. Can you provide me with the estimated EPS estimates for SEG for 6/98 and 6/99? Growth rates? I am seeing an $.85 estimate from Gruntal for 1998...can this be right? Before this cut it was $1.37. The Zack's estimate at the WSJ Briefing Book site is showing $1.43 for '98 and $2.66 for '99. These look high to me, and I question them. If you or anyone else has a handle on earnings estimates as they now exist following the recent bad news, I'd appreciate the info. Regards, Joe E

To: uu who wrote (4183)	11/20/1997 12:11:00 PM
From: stock bull	Read Replies (3) \| Respond to of 7841

Addi & Nicewong; I should note that I do not work for SEG. I am just an investor who uses fundamental and technical analysis in order to evaluate a company. Since I spent my career in the computer/peripherial industry, I believe that I have a very good understanding as to how these companies function. Having said this, I offer my thoughts as follows: Segate is an excellent company. However, the disk drive industry is cyclic and periodically enters into price cutting in order to gain market share and move product. Thus, margins suffer and profits decline. Wall St. analysts don't like this and, therefore, downgrade the companies. The disk drive companies normally trade at a p/e of 15. Given future earnings forecast, it seems to me that SEG should trade for around 17 to 18 dollars, give or take a few dollars. In no way is it going to trade in the high 20's or 30's. So far SEG is showing resistance in the low 20's. However, I believe that on market weakness, the stock will drift down into the teens. I for one would not put any money into SEG until the fundamentals show improvement. I don't like to dollar average down, I would prefer to average on the upside. Over the last few years, SEG has grown through acquisitions and diversified from their basic disk drive business. I believe they now need time to get their internal operations in order...that is, improve operating efficiencies, design cycle time. time to market, inventory and financial controls, etc. This will take time. I estimate that 12 to 18 months will be required to get things in order. Don't forget, SEG has announced that they are now reserving more than 100 million dollars for restructurng. Restructure what? I'll let you answer this question. (I trust that you read yesterday that Quantum is closing their Colorado head plant.) Its my opinion that the disk drive industry may see further consolidation within the next few years. Well, these are my thoughts on SEG. Since I'm just an individual investor, I strongly recommend that you don't buy or sell based on my comments. Do your own analysis. Expand your analysis beyond the technical merits of the company's products and markets. Keep in mind, its the Wall St. analysts and fund managers that drive a stock's price. Good luck with you investments. Stock Bull PS: I should note, I believe that SEG's products are excellent and should be very competitive in the marketplace.