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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Wallace Rivers who wrote (45700)	11/29/2011 2:55:42 PM
From: Sergio H	Respond to of 78546

GLW I posted in Sept. that when a stock hits a new low, that it is a good time to evaluate why. Message 27652282 <It appears that the flat panel displays account for half of the GLW's earnings and that their market share in this segment has been steadily declining since its peak in 2009. Additional concern is that only two customers account for almost all of their flat panel business. > As you know, the news is that one of their flat panel customers has decided not to honor their contract. I don't know what legal remedies are available for GLW, if any, but in today's climate any bad news tends to be exaggerated. I think GLW will bounce back, and would look to buy in where the gap in the chart was. I know this thread hates technical info, but there's a gap at 12.90 that was filled today. I think this gap fill will provide technical support. If support fails here, I would bail and wait for the stock to find a bottom. There is now only one major customer for their flat panel business until we hear otherwise so there is still reason for caution. If you are going by just value metrics and by measuring years of management's ability to steer the co., then this is all just a bump in the road. You would conclude that GLW will be able to find new customers for their glass panels.

To: Wallace Rivers who wrote (45700)	11/29/2011 3:21:20 PM
From: Spekulatius	Read Replies (2) \| Respond to of 78546

re GLW, I bought a first chunk at a little bit above 13$. I buy more if it hits 12$. I found the optimism that GLW management showed a few weeks more surprising than the weak forecast that they issued today. It does not take a lot of street smarts to determine that the LCD sector is week, just look at LPL, AUO and Nippon Electroglass numbers which were all weak. That said, I think this is going to turn as well, the sector is know for wild swings in the supply chain and this is true on the way up just as well as on the way down. As for suppliers not honoring the contract - for get about legal remedies. The biggest customers are AUO and LPL and if any of these is not honoring contracts, a solution out of court has to be found since the interdependency is just to great (there only two or three major display glass suppliers and maybe 3 major LCD panel customers). GLW biggest customers is actually Samsung, which runs a joint venture with GLW to produce the glass for them. if that is the customer not honoring the contract, good luck suing too.

To: Wallace Rivers who wrote (45700)	11/29/2011 7:18:19 PM
From: J Mako	Read Replies (1) \| Respond to of 78546

Apparently GLW's mgmt didn't see it coming. Otherwise, the CFO wouldn't buy shares on the market. The first order issues don't worry me too much -- shrunk margins, lowered volume, dropped utilization. We've been there before in the GFC. As Clownbuck said, the throughput in the supply chain fluctuates wildly. All these don't change the long-term fundamentals of GLW's business and its moats. But I start pondering upon the second order implications -- why did that LCD maker went to such an extent to breach a contract? Is the LCD industry going through permanent structural changes? Is that LCD maker under financial stress? (Do they have PIIGS bonds??) Is it going out of business? Sergio rightly pointed out the risk of GLW's concentrated clients that I'd dismissed earlier. Do we know which LCD maker cancelled the contract?