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Technology Stocks : Seagate Technology -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (5363)	8/2/1998 10:55:00 PM
From: Frodo Baxter	Read Replies (1) \| Respond to of 7841

>But the behavior of this market is unlike many with the most direct comparison I can think of being d-ram. So, would you buy Micron? Didn't think so. >That the DD industry has delivered a staggering 60% per year performance improvement to its market while reducing the cost of storage by factors of 30% overall in the last three years is an amazing achievement IMO. The only important benchmark should be that return on invested capital be higher than the cost of capital. For the data storage industry, this just ain't so. >My candidate is Seagate with substantial trimming now under their belt (10% world-wide staff reductions), a new low-cost drive announcement for the so-called sub-zero PC market, a significant regain of market share in the high end, an unreported improvement in head yields, a potential spin off of the software holdings, and a change in helmsmanship may make it the best candidate for the recovery that will inevitably occur. OTOH, SEG still is the most bloated employee-wise, hasn't managed to grow the top line, can't stop the bleeding on desktop, facing tremendous pressures on the high-end segment which they once owned, and is not even in the running for time to market. Software is small, barely profitable, and what questionable growth it has comes from acquisitions, not internal. Pull up the longest chart of SEG you can find. If you timing is impeccable, you may take home a huge winner. If not, well, the stock was around 20... in 1987.

To: Stitch who wrote (5363)	8/3/1998 11:43:00 AM
From: Kevin Linder	Respond to of 7841

Stitch; I agree with you it is something of a oversimplification. The Disk Drive is extremely competitive and has grown tremendously technology-wise. I think you are right about the thought of picking a winner. I also think SEG is one of the winners. I think IBM is undergoing a remarkable transformation. QNTM is going to be okay. I think that WDC, MXTR, and possibly Fujitsu are going to be possible casualties. Korea and Japan's problems should start to affect these companies soon and should start to help out the US manufacturers (I hope). I don't know when this slump in the disk Drive industry is going to end - I didn't think it would get to these levels in the first place. I guess lots of people got blindsided. I wouldn't be surprised if we start slipping back into more problems in this industry though. Maxtor's IPO raised a net $300 million for the company. This gives them room to continue the battle so I wouldn't be surprised to see more bloodshed here. Kevin Linder