*AV*---Today's Newsletter, finally.
Radar Trader Newsletter
High Tech Commentary-- Scan List
September 4, 1998
HOT FLASH AND LATE BREAKING NEWS
SYMANTEC(SYMC) ORDERED TO STOP SELLING, STOP ADVERTISING AND IMMEDIATELY RECALL FROM CHANNEL ALL NORTON UNINSTALL DELUXE. COURT GRANTS CYBERMEDIA'S (CYBR) REQUEST FOR INJUNCTION
biz.yahoo.com
Watch real closely for a play on both SYMC and CYBR
OPENING COMMENTARY FOR SEPTEMBER 4, 1998 - Andrew Vance
We are going into a 3-day weekend with the market closed on Monday. All indicators earlier yesterday and last night were are that we will not have a real positive move in the market today. It seems that all attempts at some buying has been met head on with selling, making it difficult to rally most of the stocks yesterday.
We also were privy to a special CNBC evening edition with Peter Lynch where he captivated the audience. I would hazard a guess that Pier 1 Imports may enjoy a good day today based on his dropping that name as well as a few others. When Peter speaks, everyone listens. I would love to see today's performance on the stocks he mentioned last night. The segment was rather interesting and enjoyable, I might add. Mr. Lynch also stated that corporate profits for the first half of this year were not growing fast enough to sustain the escalating stock prices since corporate earnings were unchanged for the first half but the DOW was up close to 18%.
A very astute broker buddy of mine quipped that Mr. Lynch "failed to observe that these top 50-100 largest capitalization stocks that are so over-owned by the institutions and Mutual Funds are STILL some of the most OVERPRICED stocks in history, based on PE."
Going into this weekend, I want to take a very conservative and mellow approach to discussing stocks. If you are in cash, you might want to find some diversions for the day and return an hour or two prior to the market close. People will be taking off early from work to get ahead start on the weekend. I am not even sure if the market will be open the entire day. The lack of interest towards the end of the session might provide some unique opportunities if you are so inclined. If you are invested, you might want to consider taking a 4 day weekend and hope for the best on Tuesday. We might see some strength next week as a post Labor Day rally may occur. Next week would be the week that I would hesitate shorting the market just like this week I was reluctant to be very long in the market.
Even though there should be no real rush to force a trade or a position, you still should be looking at some of your personal favorite stocks and give them a good once over.
TIMELY TOPICS AND STOCKS
CKSG(13-1/4, -2)-USWB(10-3/16, -2 1/8)-- CKSG was upgraded by BT Alex Brown yesterday from market perform to Buy, more than likely due to the impending synergies of the USWB/CKSG merger announced a few days ago. There could be some interesting plays here relative to the exchange ratio, much like the TLAB/CIEN deal. USWB traded down today and was a very nice short play on my part. Both stocks probably should have been shorted.
INTV(18-7/8, +1/16) got the nod today with upgrades from both First Albany (But to Strong Buy) and Landenburg Thalman (Hold to Buy)
Keynote Internet Performance Bulletin: Online Stock-Market Trading Frenzy Produced Minimal Impact on General Internet Users biz.yahoo.com
In A Desperate Move, Hyundai & LG Semicon May Merge
Hyundai Electronics and LG Semicon to merge and become the world's second-largest producers of memory chips. Combined Marketshare should be 17%, second only to Samsung, which has 19% of the market. They are still working out the Ts & Cs (Terms and Conditions) but it appears they have informally agreed to merge. Between both companies, they have a combined debt burden of close to $12 billion with the majority of it owed by Hyundai (~$7.5 billion). Considering the economic turmoil in Asia, this new entity may still have trouble getting financial support from their lending institutions.
This new enterprise is still faced with massive over-capacity in the DRAM sector. The capital expenditure necessary to retool the excess capacity for other device technologies could be prohibitive given their present combined financial situations.
The NASDAQ Stock Market will replace MCIC with YHOO on its Nasdaq 100 index after WorldCom (WCOM) completes its acquisition of MCIC.
ETEC(27-3/8, -1 5/8) - reported fourth-quarter earnings of $18.2 million, or 80 cents a share, compared with $12.3 million , or 54 cents, a year earlier. This beat analyst expectations by 3 cents. Revenue for the quarter was $87.8 million compared to $72.6 million for the same quarter in 1997. This was just a refresher of what was talked about in yesterday's newsletter. However, today I received 3-4 inputs from different organizations that have become interested in this stock. Therefore, for better or worse, I think this stock is "in play". I would be watching this closely. Their were 2 noteworthy inputs.
ABN-AMRO, yesterday morning called ETEC "The best looking company in a depressed industry" and backed it up with a nice 2 page research update.
CS First Boston which has a "HOLD" on ETEC reported "Q4 Tops Estimates as a shift to advanced mask-writers drives Quarter to Quarter revenues up 25%" They are still cautious but believe ETEC is poised for a pickup in business in 1999. They find ETEC interesting due to its FY99 EPS of $3.00 which gives this a 10:1 P/E ratio. They also released a 2-page report for general consumption.
SANM(23-1/2, -1 5/8) - rate a Strong Buy at CSFB (target high $50s), SANM Pre-Announced an EPS shortfall for FY4Q98 but considers the Altron acquisition as positive to future earnings. A possible reason for the FY4Q98E EPS shortfall might be due to an order push-out from 3 major customers which may negatively impact sales revenues by close to $20 million, resulting in a 5 cent drop in EPS for FY4Q98. Hopefully this is just a one time occurrence and they are able to get back on track going forward.
RST SCAN LIST COMMENTARY FOR SEPTEMBER 4, 1998
We only had 10 stocks make the cross indexed list today with a all of them repeat performers from the few weeks. Without going back and verifying, I think 8 of the 10 have appeared on this list over the past 5-7 trading sessions and probably within the last 3 days. With the exception of MUEI and QTNM, they all seem very familiar from this week relative to comments. More importantly, TECD(42-3/8, +2 15/16), the best performer of the group, got a real strong commentary from yours truly yesterday. Take that Market Mavens, CNBC, Squawk Box and Joe Kernan !!! Finally, in the midst of a negative day in the market, all these stocks were safe havens from the downdraft in prices that occurred today.
NTAP(46-3/4, +1/8) - no news other than initiation of coverage by PaineWebber as a buy. As best as I can tell, this was announced after the market closed but I would verify. As a side note, PWJ also initiated coverage on almost all of the computer, mainframe and workstation companies. NTAP traded below it daily average volume.
ICST(9-9/16, +1/16) - slightly higher than normal volume with no news other than what we shared yesterday.
TXCC(19-1/16, +1/16) - no news today or since the 8/12/98 Quarterly report filing. TXCC held its own today in the face of a negative market with volume trading at 50% of its average daily volume.
DBRSY(12-5/8,1/8) - nothing to discuss here other than it appears on my universe of stocks because of the global economic crisis. Russia has more than its fair share of Gold and Diamonds to help revitalize their economy. With the ruble plummeting yesterday and the Russia stock market off close to 90%, what else do they have. This may not be an appropriate stock to watch but it one that I choose to watch as hopefully a barometer of things that might come.
TECD(42-3/8, +2 - 15/16) - the Home Run of the day for us, rising 7.5% on a down day. After reporting better than expected quarterly earnings, TECD said it had strong second-quarter sales for all its product divisions, with both networking and peripherals divisions topping their sales chart with increases of 54 percent and 51 percent respectively, over last year. TECD opened up $1. That did leave at least $2 of profits to be made on this stock. The stock rose to an intra-day high of 43-1/8, allowing the best of the best traders to walk away with at least $2.50 for their efforts. Seems like there were also a bunch of news releases after market close Wednesday but an equal amount of news stories very late last night. Even the Motley Fool jumped on the band wagon giving TECD the lead in for both their Lunchtime and Evening News.
Lunchtime Motley Fool fnews.yahoo.com
Evening News Motley Fool fnews.yahoo.com
Tech Data gains on earnings report
cbs.marketwatch.com
For those that missed the official earnings release on Wednesday, after market close: marketwatch.newsalert.com
WCOM(47-3/8, +1 5/8) - definitely an upbeat day for WCOM, trading at 1.5X average daily volume and up 3.6% for the day. I scanned all the news releases that mentioned WCOM and only found one techno-geek article worth mentioning. The move towards VPNs and the need for more secure remote telecommuting or e-commerce requires the integrastion of certain protocols, encryption and Public Key Infrastructure. If you are interested in a quick overview the following link may be worthwhile. Just a side note, when the MCIC/WCOM merger is finalized, MCIC drops off the NASDAQ index and is replaced by, off all things, YHOO. That is what we need, another flaky stock with extremely volatility to go on the NASDAQ index.
Intelispan to Bundle Public Key Infrastructure with WorldCom's Managed Private VPN Service. This integrated service will allow corporations to easily and securely broaden the reach of their Intranets and extranets for the deployment of E-commerce applications. biz.yahoo.com
WCII(23, +7/16) - no news and I have heard no rumors or even whispers of takeovers as was the case a few months ago. Funny how that happens. It did trade 1.5X of its average daily volume.
SYMC(20-1/4,-1/16) - this was the only losing stock in the group of 10 and one that I was giving a positive slant to yesterday. However, I expect a good deal of chaos in this stock this morning based on a late breaking story that occurred around midnight last night. This is a repeat of what is the lead HOT TOPIC at the beginning of my daily commentary.
Symantec Ordered to Stop Selling, Stop Advertising and
Immediately Recall From Channel All Norton Uninstall Deluxe. Court Grants CyberMedia's Request for Injunction
biz.yahoo.com
MUEI(14, +3/16) - Don Young, analyst for PaineWebber started coverage on most of the computer companies, giving MUEI a buy rating. Hardly worth the effort when you initiated coverage across the board, playing all candidates.
QNTM(13-1/4, +9/16) - CIBC Oppenheimer raised it coverage from Hold to Buy yesterday.
AND NOW A WORD FROM THE RADAR ROOM:
A quick update of the Radar Room since I do not want to discuss anything new here going into a 3-day weekend. Pre-Labor Day Friday may not historically be an up day anyway. Major overnight markets weren't looking to good. I will briefly plant a thought, though.
I do not know if anyone has made a direct correlation between trading volumes at online trading firms and the overall market, but I would assume they would be somewhat in line with each other. Given the tremendous trading volumes in August and the start of September, on line trading companies like Web Street, DLJ direct, AMTD and EGRP are probably running ahead of anyone's trade activity estimates for the present quarter. The core companies, AMTD-$17, -1) and EGRP-$18-1/4, -5/8) might surprise Wall Street with their numbers. Even though the recent market volatility might depress account growth in September, if September is a strong trading month, we could see an upside for both of these companies. OF the two mentioned here, AMTD may have had some trade reporting issues relative to account balances and confirmations.
AEIS(7-1/2, -1/4) - still watching for a bottom. See previous day's comments
TECD(42-3/8, +2 15/16) - see today's section on this good trade
TLTN(13-3/4, +3/4) - a little misleading since it did open up at 13-1/2 but did have an intra-day high of 14-1/2, making this a good day-trade.
ETEC(27-3/8, -1 5/8) - subject of discussion in today's issue.
VLSI(7-13/16, -1) - looked to be a good call from yesterday but the stock opened down 1-3/8 at 7-7/16, trading as low as 7-1/4 and as high as 8. Probably did not present a good play due to its lower opening.
INTV(18-7/8, +1/16) - stock opened down 7/8 and would have been an excellent play given its trading range of 17-3/4 to 19-1/2. This stock was a steady riser until just before noon EDT when it started to settle back down again.
PCTY(11-1/8, +7/16) - up 4% yesterday but this all occurred at the open. This was just an FYI on a beaten down stock. No real interest on my part but there might have been some "dead cat bouncer" types reading this newsletter.
XON(63-15/16, -1/16) - indicative of the general health of the oil sector. We mentioned we did not think we have seen the reversal to the positive side yet and then XON was getting near breaking a double bottom, I think. Weakness still being shown.
ADPT(10-9/16) - Today is the day that we should see the announcement of the RIF of about 50 individuals, unless a miracle of venture capital funding occurs. No news yet.
TLAB(42-7/16, -1 5/16)-CIEN(26-3/16, -2 9/32) - still a heavy bit of trading volume and uncertainty surrounding the merger. See yesterday's report for the skinny surrounding the delayed shareholder vote.
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Prosearch 5.0* Top Stock Report 09/03/98
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5> NTAP - NETWORK APPLIANCE CORP COM .DPE
Price= 46.8 ( 95) AvgVl= 208.2 ( 91) 1-Dy = 100.2 ( 84)
2-Dy = 103.3 ( 88) 3-Dy = 112.1 ( 94) 4-Dy = 101.6 ( 89)
8> ICST - INTEGRATED CIRCUIT SYS COM .ESE
Price= 9.6 ( 34) AvgVl= 275.8 ( 93) 1-Dy = 100.6 ( 87)
2-Dy = 108.5 ( 95) 3-Dy = 147.1 ( 99) 4-Dy = 105.8 ( 94)
9> TXCC - TRANSWITCH CORP COM .ESE
Price= 19.1 ( 78) AvgVl= 304.7 ( 93) 1-Dy = 100.3 ( 85)
2-Dy = 112.9 ( 97) 3-Dy = 121.0 ( 97) 4-Dy = 115.5 ( 98)
12> DBRSY - DE BEERS CONSOL MINES LTD A D
Price= 12.6 ( 57) AvgVl= 800.8 ( 97) 1-Dy = 101.0 ( 88)
2-Dy = 100.5 ( 75) 3-Dy = 109.7 ( 92) 4-Dy = 104.1 ( 93)
18> TECD - TECH DATA CORP COM .DLD
Price= 42.4 ( 94) AvgVl= 399.3 ( 95) 1-Dy = 107.4 ( 97)
2-Dy = 107.2 ( 93) 3-Dy = 112.0 ( 94) 4-Dy = 109.0 ( 96)
21> WCOM - WORLDCOM INC COM .TLD
Price= 47.4 ( 95) AvgVl= 12461.9 ( 99) 1-Dy = 103.5 ( 94)
2-Dy = 107.0 ( 93) 3-Dy = 115.7 ( 96) 4-Dy = 101.3 ( 88)
24> WCII - WINSTAR COMM INC COM .TES
Price= 23.0 ( 84) AvgVl= 1421.8 ( 98) 1-Dy = 101.9 ( 91)
2-Dy = 116.0 ( 98) 3-Dy = 126.0 ( 98) 4-Dy = 103.3 ( 92)
41> SYMC - SYMANTEC CORP COM .DSO
Price= 20.3 ( 80) AvgVl= 822.5 ( 97) 1-Dy = 99.6 ( 54)
2-Dy = 104.5 ( 90) 3-Dy = 123.6 ( 98) 4-Dy = 113.2 ( 98)
56> MUEI - MICRON ELECTRONICS INC COM .DCS
Price= 14.0 ( 63) AvgVl= 972.4 ( 98) 1-Dy = 101.3 ( 89)
2-Dy = 107.6 ( 94) 3-Dy = 119.1 ( 97) 4-Dy = 101.3 ( 88)
65> QNTM - QUANTUM CORP COM .DPE
Price= 13.3 ( 60) AvgVl= 3597.2 ( 99) 1-Dy = 104.4 ( 95)
2-Dy = 106.5 ( 93) 3-Dy = 115.8 ( 96) 4-Dy = 96.3 ( 37)
Andrew |
