*AV*--INTC hiccups and the world markets have a heart attack the next day. On day 2 they decide they may have gone a little overboard. However, what we saw was INTC drop like a rock, DELL retreat, and MU go up. Now let me get this straight. INTC issues warning which means less CPUs(??), which affects DELL in terms of less CPUs=less boxes, but the guy who makes the DRAMs for these boxes goes up. Only reason for this type of disconnect might be that MU was upgraded by an analyst or two while INTC was downgraded. What this all means is we have an inefficient market. That should come as no shock to anyone.
Market mentality is MM, money manager, institutional investor, brokerage, mutual fund, etc. inefficiencies and lack of understanding or vision for the long term. We are in for Rocky Times until this calms down. I am being practical while others are being emotional, so it is difficult to predict the actions of an irrational bunch of individuals or groups that influence the actions of the herd. [With this PRE-claimer stated, I will now answer your request]<GGG>
I have been looking over some of my transactions and have decided that the "trader" in me has taken a more aggressive posture. I am getting caught up in trying to make the quick profit because that is what we all basically want. This is the same thing that is being done by the big boys that influence the prcing of the stocks. Look at CYMI. It did not move because it was not documented they had anything to do with the UT breakthrough. DPMI was very prevalent in all the releases and moved dramatically only to retrace after the hoopla died off. CYMI goes out and makes its release on the most inopportune day and does not benefit as much as it could. Timing, once again, rules the day.
IDTI-While I am on record as not being very impressed with the CEO's "bedside manner" during conference calls, this company is poised for greatness. Without belaboring the point, they have re-engineered their company at the expense of 8 really pathetic financial reporting quarters. The stage is set for them, even with the most recent announcements of the $500 PC for the masses. There is a place for the products, the design libraries, the manufacturing capabilities, and the technology roadmap they have chosen. They will grow into this. I am still waiting to buy some sub $12 shares which may or may not come to pass. With the "ides of March" approaching and the still uncertain market, it may come to pass. If you own the stock, hold tight and think about averaging down should it drop below $12. This is a keeper and if the analysts are only partially correct, we should see $20-$25 for ourselves.
CYMI - Their charted course is crystal clear. They own the market and it is theirs to lose. they have competitors in the wings that can and prabably will garner some of its marketshare. The market is big enough for them to have competitors. The end unit customers (ASMLF, Nikon, Canon, etc.) look to be raising prices on their systems because the market will bear it. Therefore, CYMI presents a good prospect as a company that may not succumb to margin erosion as fast as many other businesses in the tech sector. I see them maintaining or improving their margins.
ASYT - This is a yo-yo stock and is now on the bottom of the YO. At these prices it is very attractive. Things are very promising for ASYT because they almost have a lock on the 300mm wafer interface and PODs. And if the financial issues of Asia roll over into both the USA and Europe, the cost effective minienvironment implementation will just gather more steam.
DPMI - As much as I like PLAB there is no discounting the D in DPMI. That D (Dupont) is a great moniker that helps to maintain a strong investment following. This is asolid company dealing in a "commodity" that is in constant need of replacement, upgrade, re-design, or new designs. Technology will never move forward without the tooling (masks and reticles) to make the new devices. This is also a long term gem with the ability to take some profits along the way as perturbations occur (UT announcement, Asian exposure, capacity issues, etc.)
KLAC - Again a solid company that in both good and bad times will prevail. Looks like anything under $40 (all bets off if their is a major correction) is a great place to think about. Defect detection and classification, along with other metrology offerings makes their products necessary as device feature sizes shrink or as companies try to lower costs and improve yields.
ADPT - took out a competitor, may fall prey to the "write-down" phenomena that seems to prevail 1-2 quarters after the completion of the deal as "goodwill, intangibles, and consolidations" of the acquisition are dealt with. There is some hope that the accreditive nature of this deal along with some shuffling at Symbios, that the overall effect might be a net "push". However, prepare for some mediocre stuff down the road. The money was made getting in early and selling out near $27. Now we have a solid company, priced towards the low side with upward potential. However, we need to expect 2-3 bumps in the road. There may be another acquisition real soon, given their past behaviors when they go on a buying spree. With this, there will be 1 or 2 "write-downs" as a result of this. The market does not seem to treat these things well.
AMAT - 500lb gorilla will prevail. If they do not sell as many systems as they want, they will either buy the competitor, raise prices for field services, raise prices on spare parts, or develop extremely costly upgrade kits<GGG>. They will make money no matter what since they are the heart of the equipment sector.
CIEN - order pushouts and no concellations. I guess it should be expected in these uncertain times. This WILL recover.
Here's a succinct bottom line. Even though INTC put out their warning, nobody really took the right posture in the market the next day. INTC's R&D was going to increase from 1997 to 1998 which included more capital equipment expenditures over their 1997 levels. They also were writing down the CHPS acquisition. Two very key points to me, they are still buying equipment (and building new facilities) and they have a unique one time short term adjustment to the Financial Statements.
Andrew |
