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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Z Analyzer who wrote (2310)	1/17/1998 9:25:00 PM
From: LK2	Read Replies (1) \| Respond to of 9256

SEG is discussed briefly in the current issue of Barron's. Barron's, Jan 19, 1998 issue; page 46 of Roundtable 98 article, Part 1: John Neff (retired portfolio manager of Vanguard Windsor Fund) is recommending SEG as a value play at current prices (around 18). Reasons for recommendation----------- SEG is the industry leader in size Has 2 billion in cash Has little debt Plants in Far East will be more competitive because of currency devaluations SEG is currently losing money, but the company could earn $3 to $4 in 12 to 30 months out. But Art Samberg, who is a heavyweight money manager that has a strong bias to technology stocks, says SEG is a bad bet at current prices. SEG could drop much further from current prices. Samberg is more of a growth stock investor than a value investor. His reasons for avoiding SEG--------------- Far East production is not an advantage because all the disk drive makers have plants in the Far East (SEG has no advantage over its competitors). The US is losing disc-drive market share to foreign competitors. A few years ago the US was gaining market share, which made SEG a much better bet a few years ago. SEG has lost its domination of the high end, which was the key factor in its very high profits. The trend toward ever-larger hard drives on the desktop has slowed (because corporations are using servers to do more of the computing that desktops used to do). ----------------------------------------- Neff is looking at SEG as one of many stocks that could be bought because it might be/could be below its intrinsic value, and if the stock is held long-term, it could pay off. Samberg appears to be focusing more on the company and industry specifics, and he says the fundamental position of SEG has deteriorated badly in the last few years, and that, at current prices for SEG, there are much better bets elsewhere.