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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: Paxb2u who wrote (33723)	1/20/1998 10:22:00 PM
From: ViperChick Secret Agent 006.9	Read Replies (1) \| Respond to of 58727

Peter D. what site was it you found for the vix thnx for S&P 500 for those of you who dont have a bloomberg machine to show your calculations at the click of the mouse or button or some other kind of service...here is something interesting that provides information calculated for you ...summed up...dont know the accuracy of the information...it doesnt cost$2000 a month so you have to check the accuracy out...but it looks interesting.. glen-net.ca here is something for you tech heads who dont get good info..from Moneydaily by email...go to their site and you can sign up for free Tuesday, January 20, 1998 Merrill Lynch cuts growth forecast for PC sector What's remarkable is the reason: Analyst Lucy Painter lays blame squarely on Asia By Michael Brush For weeks, economists -- who focus on the big picture -- have been shaving their 1998 growth forecasts because of the Asian contagion. But, curiously, company-level analysts have largely remained silent. That began to change Tuesday when Merrill Lynch's personal computer analyst cut her outlook for the sector, blaming an expected slowdown squarely on the impact of economic problems in Asia. Yes, other company-level analysts covering other sectors -- namely semiconductors and oil service stocks -- have cited Asia in revising forecasts downward. But Asia has always figured among many, usually more pressing, industry trends. In cutting her earnings outlook for the PC sector and tech bellwethers Compaq (NYSE: CPQ), Dell (NASDAQ: DELL) and Microsoft (NASDAQ: MSFT), however, Merrill's Lucy Painter laid the blame on problems in Asia. First, she cites the direct impact of a slowdown of PC sales in Asia -- which accounts for about one-fourth of the number of world sales by unit. Second, she says the effect of Asia on earnings at U.S. corporations will cut into their capital spending budgets, and reduce the amount they spend on computers. Overall, Painter shaved only three percentage points off her 1998 PC growth forecast, cutting it to 14% from 17%, in a conference call Tuesday morning with money managers and the Merrill Lynch sales force. Such a small cut may seem like good news, given the terror Asia has struck among tech investors. Don't be comforted just yet. Painter admits that her revision is just a first pass at estimating what effect Asia will have on the PC sector. "The next few months," she says, "will bring greater visibility in terms of any change in planned spending, as the indirect effects of the Asian flu are felt by U.S. corporations." Painter expects most of the impact of Asia on the PC sector to occur in the first and second quarters of this year. By July, she thinks a good piece of the bad news will be out. Despite the bad news for the PC sector overall, she thinks the top companies in the field will continue to do well because of ongoing consolidation in the industry. While she cut her earnings estimates for Compaq, Dell and Microsoft, for example, she did not cut her recommendations on those stocks. (Compaq and Microsoft are still buys; Dell gets a lower rating of "accumulate," but only because the stock price has come up so much recently.) And she adjusted down her earnings outlook because she thinks revenues will take a hit -- not because of weakness in profit margin growth or rising expenses. The leading PC sellers are gobbling up market share at the expense of smaller firms because of a continuing trend among the best in the field. In part by using a "built to order approach," the leading PC vendors have improved inventory management and distribution, and brought down manufacturing costs. They are passing some of those savings on to consumers, and taking sales away from their smaller competitors. By the end of the third quarter last year, this had helped the top five vendors grab 38% market share, up from 20% in 1992. She expects that group to have 42% share in the fourth quarter, and 50% at the end of 1998. And within five years, that could jump to 75%, she believes. Leading the pack in the consolidation trend are Compaq, Dell and Hewlett Packard (NYSE: HP), says Painter. Each has had growth rates three times as high as the industry average for the past few quarters, and Painter expects that to continue. Despite the bad news for PC sales, Painter expects many segments of the tech sector should come through the Asian turmoil without too much trouble. Based on the results of several surveys which attempt to gauge the priorities of information technology managers at major companies, she says several areas should remain unscathed. They are: Year 2000 solutions, the completion of big projects like conversions to Windows NT systems, and the setting up of company intranets. Some of the highlights of Painter's revised outlook for the PC sector include the following. * She has reduced projected 1998 PC sales growth to 14% from 17% (97 million units vs. her prior estimate of 100.3 million units). She thinks 1999 will bring 16% growth, or sales of 113 million units, down from 114.8 million units. * She thinks 1997 sales growth will slow to 18% from 20% (85 million units vs. 86 million). Even though the year is over, the final numbers won't be out until the start of February. * A good part of the decline will stem from weak demand in Japan. But North America will also contribute -- because a slowdown in corporate earnings growth caused by Asian problems will make companies reduce capital spending. * Like many analysts, Painter is counting on continued strong growth in Europe to offset the impact of Asian somewhat. But several economists who follow Europe closely are calling this theory into question. They say Asia will have a bigger than expected impact, and that cutbacks in government spending to meet targets required for a single currency will slow down overall economic growth considerably. * Industry revenue growth will slip to 10% this year, down from her previous forecast of 13%. The deepest declines will occur in consumer desktop and corporate servers. Major corrections have already occurred in the portable and corporate desktop computers in the past few years.