*AV*--I will try to put something together to answer this question but for now, here is today's "paper".<GGG>
Radar Trader Newsletter
High Tech Commentary-- Scan List
September 10, 1998
OPENING COMMENTARY FOR SEPTEMBER 10, 1998 - Andrew Vance
One of the headlines from last night was "NASDAQ Slumps on Profit Taking, Clinton Scandal." We warned you to be very cautious and careful yesterday. Surprisingly enough, as you will see, most of the stocks we spoke of did well considering the turbulence in the market. As a matter of fact, the Cross Indexed RST Scan List for today shows all of the stocks had positive performance. Many of them are repeat performers. This just underscores the fact that the market can perform well for you, independent of the indices, IF you do your homework and keep on top of things.
TIMELY TOPICS AND STOCKS
I am really getting energized about the wireless communications sector. Yesterday Lucent Technologies Inc.(LU) discussed its "Blast" technology, explaining that it could boost the capacity of some wireless telecommunications links by 10 to 20 times. Of course, the technology comes from our good friends at Bell Labs R&D that just happens to be part of LU. This technology is adapted well for fixed wireless applications. BT Alex. Brown. Is turning slightly more bullish and raised their rating on LU to a "buy". Well, a good deal of good that did since LU dropped 3-5/8 for the day (77, -3-5/8)
AMD(16-1/4, +1 1/8) - DLJ reiterated their "Buy" rating and their analysts believe strong third-quarter sales might result in a break-even quarter. The company looks to be on track to ship its 400 MHz microprocessor in the fourth quarter with a 450 MHz processor due in Q1-99, making them extremely competitive with INTC.
MER(59-3/8, -6 5/8) - got trounced as a result of the post Tuesday market close announcement that its exposure to the troubled emerging markets would cost them $132 million off its bottom line during the first two months of the third quarter. This cuts into overall earnings for July and August, which should run slightly over $100 million. Stock was up just over $4 on Monday only to free fall yesterday due to the timing of their announcement.
DY(28-3/4, -1 «) - this makes a loss of 3-3/8 in the past 2 trading days making me extremely happy that I exited on Monday. It is beginning to look like fallout over the impending registration and offer of shares by both the company and insider shareholders. This stock does not trade huge volumes so the added float is significant. Just biding my time until it looks right to jump aboard again.
MTZ(17-5/8, -1/4) - not to shabby. MTZ gave back ¬ of the 2-1/2 it went up yesterday on a bad day today. Both MTZ and DY have similar businesses and do not, as yet overlap to the extent that we could call them fierce competitors. DY has prospered as MTZ has faltered. Maybe it is time for a comeback for MTZ.
BIOTECHS-PHARMACEUTICALS-HEALTH -just thought I would show the group from the RST List.
2> AGPH - AGOURON PHARM INC COM .DRE
Price= 28.0 ( 88) AvgVl= 564.9 ( 96) 1-Dy = 107.6 ( 97)
3> IMCL - IMCLONE SYSTEMS CORP COM .DBI
Price= 11.6 ( 51) AvgVl= 210.5 ( 91) 1-Dy = 116.3 ( 99)
5> QHGI - QUORUM HEALTH GROUP COM .HEA
Price= 21.7 ( 81) AvgVl= 680.3 ( 97) 1-Dy = 105.2 ( 96)
14> HCFP - HEALTHCARE FNCL PTNRS INC COM .FSE
Price= 39.9 ( 93) AvgVl= 297.6 ( 93) 1-Dy = 105.0 ( 96)
15> EFII - ELECTRONICS FOR IMAGING COM .DSO
Price= 17.3 ( 73) AvgVl= 989.7 ( 98) 1-Dy = 101.0 ( 90)
18> AXPH - AXYS PHARMACEUTICALS INC COM .DRE
Price= 4.8 ( 15) AvgVl= 203.1 ( 90) 1-Dy = 111.7 ( 98)
26> MDRX - MEDICIS PHARM CORP COM .DET
Price= 38.0 ( 92) AvgVl= 242.7 ( 92) 1-Dy = 103.4 ( 95)
30> AVIR - AVIRON COM .DBI
Price= 14.9 ( 66) AvgVl= 273.5 ( 93) 1-Dy = 104.8 ( 96)
2-Dy = 117.1 ( 98) 3-Dy = 117.7 ( 98) 4-Dy = 109.6 ( 94)
44> SEQU - SEQUUS PHARM INC COM .DRE
Price= 7.0 ( 22) AvgVl= 284.2 ( 93) 1-Dy = 100.0 ( 77)
48> FHCC - FIRST HEALTH GROUP CORP COM .HHC
Price= 20.1 ( 79) AvgVl= 289.3 ( 93) 1-Dy = 102.5 ( 93)
RST SCAN LIST COMMENTARY FOR SEPTEMBER 10, 1998
We had 12 stocks make the cross referenced list today with a number of them recent repeats from prior days' lists. Even with the reversal yesterday in both the NASDAQ and DOW composites, most of these stocks out-performed the indices.
TECD(45-3/8, +7/8) - considering this stock opened 3/8 lower this morning and closed on the bid, the opportunity for a $1.25 gain was possible. Trading at just over 1.5X average daily volume(ADV), TECD provided a nice haven against the market reversal yesterday. This was also mentioned in the newsletter yesterday as a stock of interest to monitor. All this comes a day after this stock popped for more than $4.
IRIDF(34-1/2, +1/8) - was highlighted in yesterday's Timely Topics section and provided all the excitement one could ask for. IRIDF open down 3-1/8 at 31-1/4 and swung up as high as 36-7/8 before settling down to this 1/8 point gain for the day. A nice, comfortable $5+ swing was presented for the taking by those that further researched the potential for a play yesterday. The best play of the day as far as I was concerned, based on a Timely Topic, resulting in IRIDF making the RST Scan List for today. IRIDF announced a delay for the start of its global satellite telephone service. IRIDF is a spin-off from Motorola (MOT).
NTAP(49-3/4, +7/16) - on lower than average volume NTAP managed to squeeze out a modest profit. We are within $2 of the 52 week high for this stock, which has had an overall positive trend since December of last year. A few minor reversals but the trend has been positive from $22 to the present level, which is more than double the price a year ago. Quality is always a virtue when dealing in this sector.
QCOM(49-1/2, +1/2) - was another of these stocks that opened lower ($1.25) only to recover and post a modest gain in a down market. QCOM bears watching and I believe it presents a unique bargain or opportunity when it falls below $50 per share. QCOM traded just over 1.5X AVD and looks to be weathering the Asian Crisis well enough that they are keeping their wits about them. This wireless communications company will be a major player as the move to this technology is incorporated in both the Asian and European markets.
ORCL(21-13/16, +3/16) - might as well go out on a limb and state that these guys might be doing the Tortoise and the Hare race with them being the slow turtle. Slow, and I do mean slow, but sure might be the operative term here.
SUNW(45-7/8, +1/2) - actually opened up $1 higher and then settled back down. I do not think there was any trading play here but it still looks to be a solid positional play for the longer term. Low enough PE and some decent earnings make this attractive. However, if they can overcome and kill the "Big Bad Gates Evil Empire" and gain control of JAVA language programming, we might be in for a nice few years much like the run MSFT has taken in the past. Not such a bad speculation since the SUNW hardware is pretty rock solid in the present marketplace. SUNW got some help today from SG Cowen & Co. after its analysts rated the company a "strong buy" with a price target of $65. Their analysts see higher-than-expected fiscal first-quarter demand for their products. They think, that in spite of Asia's and Japan's weakness, momentum was still strong in North America, Europe and Latin America. Cowen analysts expect SUNW will meet first-quarter earnings estimate of 48 cents a share on revenue growth of 12% to 13%.
As you were made aware yesterday, SUNW and MSFT are going at it in the courts.
Sept. 9, 10:26 pm EDT - Sun says Microsoft tried to highjack Java biz.yahoo.com
Sept. 9, 9:46 pm EDT - Sun makes courtroom stand on Java
Says Microsoft intentionally limited language's potential cbs.marketwatch.com
Sun takes on Microsoft in court - By Brenon Daly, 9:13 PM EDT Sept. 9 cbs.marketwatch.com
Yahoo! News Sept. 9, 9:07 pm EDT Sun exec: Microsoft said it wouldn't extend Java dailynews.yahoo.com
RDRT(7-5/16, +13/64) - a fancy way of saying it was up under ¬ for a stock that I have previously stated was on somewhat thin ice, given that both RDRT and APM may not both survive in this cutthroat environment. RDRT may have the best leg up but IBM is debuting some things for the Digital camera market that has direct applicability to the disk drive sector. We should also not forget that RDRT is running close to -$5.67 per share, if my data is correct.
QNTM(14-3/16, +3/16) - trading at 1.5X ADV and making a slight amount of earnings, we may be seeing just a breath of positive behavior. For the past year, the graph has been indicating a decline from just about $43, down to its present level. Disk Drives are getting cheaper and cheaper each week, it seems, while also providing step function increases in storage capacity. Margins have got to be suffering just as much as the margins have suffered in the IC DRAM arena. IBM announced and unveiled what seems to be the world's smallest and lightest hard disk drive with a disk platter about the size of a quarter. The drive should hold over 200 times more data than a floppy disk, making it attractive to Cannon, HWP, Hitachi and Minolta for integration into mobile and hand-held devices along with digital cameras.
Sept.9, 7:31 am EDT -- Quantum and Tandberg Data Announce Manufacturing
License and Marketing Agreement For DLTtape Products biz.yahoo.com
GALTF(10-3/4, +1/4) - selling just about $1.75 above its 52 week low which was recently achieved, we almost look as if the stock has reached a plateau and is waiting to spring forward back to historical levels. The big issue here is the "F" at the end of the symbol. Even though we are talking about the Middle East, we are still weary of the foreign economics crises, in general.
ATML(8-1/16, +1/16) - still struggling and I am not too impressed with their position relative to their product lines. Very competitive market the are involved in plus they are probably in need of a retrofit of their facility in Colorado Springs. T o remain competitive, ATML may be forced to advance their technology and their equipment set.
EGRP(19-3/16, +3/16) - this is not really a stock from my universe but rather a stock I commented on in a previous newsletter. I still think that the volumes of shares that were traded over this previous quarter may reflect very positively in the earnings for EGRP and other online trading companies. A good number of people are doing their investing and trading this way, so it almost seems evident that the recent volume action of the past month would enrich the piggybanks of these types of companies. Stock only traded 50% of its ADV.
TLAB(44-15/16, +1 «) - the gain does not tell the full story for this stock. Close to a 6 point swing today from as low as 43 to 48-1/2 as the CIEN/TLAB impending merger gets yet another twist. Apparently CIEN lost the ATT order, had Sprint put them on hold, and today announced another cancellation of an order and the business going to a competitor. This was estimated at being another $240 million reversal of fortune. Bad thing here is that they were the incumbent at Digital Teleport. CIEN was down 8-1/2 points today, bringing its stock price to 19-3/4 at the close. It doesn't take a rocket scientist to do the math and see that something is extremely out of whack. If the 0.8 exchange ratio still holds up, each share of $19.75 CIEN will be converted to 0.8 shares of TLAB with a value of roughly $36 if both prices held firm until the merger was complete. Now I ask you, if you were a TLAB shareholder, would you want this deal to go through?? Or are the Arbitrage guys going to clean up on this big time. TLAB has traded more than 3X ADV yesterday, while CIEN traded just under 10X ADV and almost 1/3 of its shares.
Sept. 5:33 pm EDT - Ciena falls on contract woes biz.yahoo.com
AND NOW A WORD FROM THE RADAR ROOM:
IDTI(4-5/8, -5/8) - the company announced it expects to record additional second-quarter pre-tax charges of $115 million to $140 million. The company will also set aside a reserve of $40 million for deferred tax assets. IDTI previously announced it would take a pre-tax charge of $50 million to $60 million for the closure of a San Jose, CA manufacturing site.
ADPT(11, -1 ¬) - gave back half of its gains yesterday, and as stated yesterday, the layoffs occurred today, affecting around 50 people. On another note, there was a good deal of information shared today by the company relative to direction of the company.
Adaptec says 200 jobs hit by new alliances - Sept. 9, 1998 09:16 PM EDT
biz.yahoo.com
Adaptec Hosts Future Strategy Teleconference Call - Sept. 9, 7:20 PM EDT
biz.yahoo.com
Adaptec Announces Broadlogic, Inc.
Spin Off to Target Broadband Satellite Market - Sept. 9, 7:16 PM EDT
biz.yahoo.com
Adaptec Continues Cost Cutting Actions - Sept. 9, 7:15 PM EDT
biz.yahoo.com
PROSEARCH 5.0* TOP STOCK REPORT 09/09/98
4> TECD - TECH DATA CORP COM .DLD
Price= 45.4 ( 94) AvgVl= 412.4 ( 95) 1-Dy = 101.9 ( 92)
2-Dy = 107.7 ( 93) 3-Dy = 107.0 ( 91) 4-Dy = 115.0 ( 97)
16> IRIDF - IRIDIUM WORLD COMM LTD CL A .TES
Price= 34.5 ( 91) AvgVl= 368.9 ( 94) 1-Dy = 100.3 ( 85)
2-Dy = 105.7 ( 90) 3-Dy = 104.7 ( 86) 4-Dy = 104.5 ( 87)
22> NTAP - NETWORK APPLIANCE CORP COM .DPE
Price= 49.8 ( 95) AvgVl= 210.0 ( 91) 1-Dy = 100.8 ( 89)
2-Dy = 104.1 ( 85) 3-Dy = 106.4 ( 89) 4-Dy = 106.7 ( 91)
23> QCOM - QUALCOMM INC COM .TES
Price= 49.5 ( 95) AvgVl= 1258.5 ( 98) 1-Dy = 101.0 ( 90)
2-Dy = 116.3 ( 98) 3-Dy = 112.3 ( 95) 4-Dy = 104.7 ( 88)
25> ORCL - ORACLE CORP COM .DSO
Price= 21.8 ( 81) AvgVl= 6883.1 ( 99) 1-Dy = 100.8 ( 89)
2-Dy = 105.4 ( 89) 3-Dy = 114.4 ( 96) 4-Dy = 107.3 ( 92)
28> SUNW - SUN MICROSYSTEMS INC COM .DCS
Price= 45.9 ( 94) AvgVl= 5197.3 ( 99) 1-Dy = 101.1 ( 90)
2-Dy = 107.4 ( 93) 3-Dy = 113.4 ( 96) 4-Dy = 109.8 ( 94)
32> RDRT - READ RITE CORP COM .DPE
Price= 7.1 ( 22) AvgVl= 842.3 ( 97) 1-Dy = 102.7 ( 94)
2-Dy = 112.9 ( 97) 3-Dy = 111.8 ( 95) 4-Dy = 105.6 ( 89)
34> QNTM - QUANTUM CORP COM .DPE
Price= 14.8 ( 65) AvgVl= 3827.5 ( 99) 1-Dy = 101.2 ( 90)
2-Dy = 109.7 ( 95) 3-Dy = 111.7 ( 95) 4-Dy = 116.7 ( 97)
39> GALTF - GALILEO TECH LTD COM .ESE
Price= 10.8 ( 45) AvgVl= 219.2 ( 91) 1-Dy = 102.3 ( 93)
2-Dy = 110.9 ( 96) 3-Dy = 112.4 ( 95) 4-Dy = 111.6 ( 95)
56> ATML - ATMEL CORP COM .DCO
Price= 8.1 ( 26) AvgVl= 1533.7 ( 98) 1-Dy = 100.7 ( 89)
2-Dy = 109.3 ( 95) 3-Dy = 114.1 ( 96) 4-Dy = 104.0 ( 86)
60> EGRP - E TRADE GROUP INC COM .INT
Price= 19.2 ( 77) AvgVl= 1035.9 ( 98) 1-Dy = 100.9 ( 89)
2-Dy = 109.2 ( 95) 3-Dy = 105.1 ( 87) 4-Dy = 101.6 ( 74)
62> TLAB - TELLABS INC COM .TES
Price= 44.9 ( 94) AvgVl= 8811.4 ( 99) 1-Dy = 103.4 ( 95)
2-Dy = 109.9 ( 95) 3-Dy = 105.8 ( 88) 4-Dy = 102.7 ( 82)
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