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

To: Sam who wrote (2572)	2/26/1998 3:15:00 PM
From: Mark Oliver	Read Replies (1) \| Respond to of 9256

You guys forgot that your cynical scenario has to include some well placed suggestions from the boss that things aren't as bad as they seem. Seagate Technology (SEG) 24 3/16 +1/16: CEO Alan Shugart of disk drive maker sees product demand as strong, but "horrendous pricing pressures" are expected to prevail over the next two quarters; still thinks that stock is undervalued..... from briefing.com This is fun. But, what does it mean? Are we going to stop investing in storage stocks? I believe in general, when you buy a stock above book value, you run on a wish and a promise. In the end, most every stock for sale is trading way beyond it's worth, but it seems to be part of the game. Like the famous statement, "storage stocks are now going to trade at higher PE's due to improved conditions". Look at Dell. These guys stuff boxes. What do they invent? Yet, they are very successful and people think they can do no wrong. So far, they are right. Did you see they now have 7 day inventory turns and 22% margins. Compare this story to storage. Dell not only has low cost of sales, but it's getting cheaper as they are selling 1 billion dollars of inventory over the internet now. I wonder when we will see serious selling of drives via the net? It seems like drives makers are still protecting the channel, but this direct sale model must be coming soon. Regards, Mark