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

To: LK2 who wrote (2311)	1/20/1998 2:27:00 AM
From: Pierre-X	Read Replies (2) \| Respond to of 9256

Re: Neff and Samberg's Wize Wurdz 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. This guy was a portfolio manager? He's recommending a stock based on shitty reasons like that? Pathetic. Lets break it down: SEG is the industry leader in size Industry leadership is most advantageous when there are significant switching costs and/or franchise value -- in HDD, these are none and none. Has 2 billion in cash This is good, particularly for reasons specific to the HDD sector--reaons Neff didn't mention. Cash alone does not a success story make, however. Has little debt Low debt => low leverage => lower ROE in good times. Credit availability evaporates during bad times, so low debt doesn't help you there. Plants in Far East will be more competitive because of currency devaluations Gawd, I can't believe he would even say such a stupid thing. SEG is currently losing money, but the company could earn $3 to $4 in 12 to 30 months out. And how exactly will that happen, O wise Neff? ---------- Samberg, on the other hand, appears to have grasped the HDD situation very well. LK, what do you mean by "intrinsic value"? PX