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Technology Stocks : IFMX - Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Mark Finger who wrote (9592)	2/20/1998 10:41:00 AM
From: Lou	Respond to of 14631

Repost from M. Muphy's col/URL for investor opinion IFMX/3/5 calls Going out of town for a couple of day's. Sorry, about the need for reformatting. I'm just in a time squeeze.] Lou ****************************************************** Feb 18, 1998 (partial) Michael Murphy's Technology, Biotech and Market Outlook Q: Is there specific news coming out on certain stocks that might move them higher? A: We were playing the earnings releases on Applied Materials and Informix. That was two pieces of news which we thought would move both stocks. On the electronics side there is not a whole lot of specific news coming. There is not that much on the positive side. On the negative side our view of what is going on in the far east is not some big sudden horrible event for U.S. corporations but, it will be a serious long term kind of depressant on certain companies such as Qualcomm that are very exposed to Korea. More broadly, we think it will spread into the rest of the economy. We believe the real effect is that the far East will slow the rest of the economy down. So Wall Street, which is not worried about domestic companies such as Airlines, Restaurants, Retail....etc. starts to worry about that. I don't know if money will flow out of those stocks and flow into technology right away. We will have to wait for those March quarter results which come at the end of April. Then we have the Hambrect & Quist Technology Conference at the end of April. Investors may then realize that the hit to technology is not that bad, it's the hit to the rest of the economy that is the problem and money will actually start to flow into tech stocks by then. Q: What are the specific names that you really like in the technology area? A: There are some stocks that we are buying very aggressively. A lot of the semiconductor equipment stocks came down sharply. Although Applied Materials has rallied a little and Lam Research has started to rally, we have been buying them aggressively. The smaller stocks have not rallied, Mattson Technology is one we have been also buying aggressively right now. In the disk drive area we started nibbling at Seagate because it is the lowest cost supplier. It takes them awhile to reduce their cost but, I think they will get there by June. Another company in that business I like is Intevac, they make the machinery that makes the disks for disk drives. So, they are not in the front line in terms of the collapse in prices. They make very high capacity disks which is where the profitability is still decent. Their stock has come down from $17 to $9 and yet they just reported record revenues and near record earnings. We have been buying Informix very aggressively when it was down in the $5 to $6 area. They clearly have turned the company around and gained market share on Oracle. Q: They gained market share on Oracle? A: Yes, they announced that their licensed revenue growth was substantially higher than Oracle's for this last quarter. They have taken business away from Oracle, they mentioned several companies specifically in a press release. The database business is growing very strongly. Larry Ellison (at the Montgomery Conference a couple of weeks ago) said that the database business is growing at 30% a year. Stockmart - Investor Sentiment Survey on IFMX bert.stockmaster.com Lou, Nobody has mentioned the possibility of the large March 5 call OI, or the Feb 7.5 call OI for that matter, as an indication of an expected buyout. There are people out there who may have insight into such things and may be taking advantage through a position in calls. Just a guess but given IFMX unique situation there may just be a suitor in the wings ready to step in. Given the drive toward consolidation in this market, its a real possibility. To all, great job on the posts!