*AV* -- I was told I had to start highlighting some of the newsletter successes to make it more attractive. Everyone here knows how to look beyond that, I hope. <GGG>
Radar Trader Newsletter
High Tech Commentary-- Scan List
September 15, 1998
OPENING COMMENTARY FOR SEPTEMBER 15, 1998 - Andrew Vance
I guess it looks as if the Clinton "affair" is starting to subside and we can get back to the real business at hand. Anyone notice that the oil stocks have started to perform. XON was the target stock I was following here and was sold today for more than a 10% gain. Remember, Gold, Diamonds, Oil prices and the faltering foreign economies.
Technology shares lead Nasdaq to finish with gains
Sept 14 (Reuters) - Nasdaq stocks rose higher on strength in technology stocks and dwindling concerns about whether President Clinton will be impeached. The computer hardware and networking stocks also showed strength. The semiconductors had already been beaten down so when Intel and Oracle gave positive announcements last week, that added back some confidence and turned investors back towards the
technology stocks.
However, this might be short lived as we enter the Triple Witching days ahead. Caution should still be the operative word and taking profits when presented should always be considered.
TIMELY TOPICS AND STOCKS
This section has once again been abbreviated since I am limiting my gratis time to just past mid night. I will bullet highlight some tidbits and then go into some details on other stocks and topics. Also, you are seeing the true positional trading philosophy at work. Take a position and have an exit target always in mind. Take profits when presented in a short time frame is also part of the technique.
Jim Bagley of Lam Research (LRCX) stated that this downturn is the worst he's seen in his career. Bob Boehike at KLA-Tencor (KLAC) implied that orders were weak for September and may result in a weaker quarter than originally expected. However, Varian Associates (VAR) is looking attractive based on it's break up valuation.
SDL Inc. (SDLI) is being aggressively recommended by some analysts as a strong buy based on the high growth in communications applications relating to optoelectronics. Ciena's (CIEN) loss of their WDM communications equipment account is viewed as a positive for SDLI when you consider who won the account. Pirelli is an important WDM
component customer for SDLI. SDLI may be gaining design wins in high powered 980 nm pump modules for fiberoptic WDM applications.
Last week (9/10) LG Semicon and Hyundai Electronics protested a U.S. ruling that they have been selling DRAMS below cost. Both DRAM producers accused the U.S. Commerce Department of making errors in their pricing review.
Brooks Automation(BRKS 8-3/4, +1/4)) signed a letter of intent to acquire privately-held FASTech Integration; the transaction is expected to be completed by the end of September. FASTech's 1997 revenues of $22.3 million is expected to position Brooks to compete in the factory automation software market.
Nikon estimates that shipments of steppers for semiconductor manufacturing will fall to about 280 units in fiscal 1998, more than 30% below fiscal 1997 shipments. In May, Nikon had projected total fiscal 1998 stepper shipments of 330 units, a 20% drop from the previous fiscal year.
KLAC(22-3/4, -1 3/4) - down over 7% and is scraping bottom. Therma-Wave announced it intends to contest the patent suit filed against it by KLA-Tencor on September 3rd alleging that Therma-Wave infringed KLA-Tencor's patent for its thin film thickness
measuring method.
MIPS(22-1/4, +1 3/4) - for those in at the $16.50 price range that we spoke of days ago, you have over 33% gains on this roller coaster ride again. You are on your own from here on out. Profits were presented and taken with new opportunities being investigated
TLAB(37-11/16, -7 5/16)Tellabs Inc. This telecommunications equipment maker canceled its proposed acquisition of CIEN (Ciena Corp.) (13-3/16, -2 3/4) and expects its third quarter revenues to be flat-to-modestly higher than in the second quarter. Well, as we stated before, TLAB either had to renegotiate this deal once more or wlak away. It was a lose-lose situation for these guys that would most certainly resulted in a shareholder lawsuit down the road if things did not work out well.
Sept. 14 /PRNewswire - Judge Jackson's rejection of summary judgment assures a trial that will let all Americans look beyond the Microsoft spin machine and learn the truth about Microsoft's illegal attempts to abuse its monopoly power. The simultaneous decision to delay the trial will allow investigators to fully document Microsoft's anti-competitive behavior -- including its routine use of illegal tactics to crush competition and restrict consumer choice.
Sept 10, 1998 ANALYSIS - Globalstar Loss Not A Permanent Setback
(Reuters) - The loss of GSTRF satellites in a failed rocket launch was seen as a significant, but not permanent, setback for both the company and the satellite telecommunications industry. However, problems should be expected in the race to build competing global satellite networks. Basically an engine failed aboard the Ukrainian-built Zenit 2 rocket that was to carry the 12 satellites into low-earth orbit. The accident triggered a sharp drop in price for GSTRF and its largest investor LOR. This did not help the handful of companies seeking to build space-based telecommunications networks.
This accident came one day after Iridium World Communications Ltd. (Nasdaq:IRIDF) announced that they would delay the start of service on its satellite network due to as yet unsolved technical problems. The life expectancy for a low-earth orbit spacecraft is only about 10 years, and the networks they are building will require dozens of functioning satellites to keep the systems functional. This means future launches will be required.
GSTRF still believes it will have its system activated by the end of 1999 with 32 satellites rather than the 48 originally planned. It has 8 satellites in orbit now and hopes to get others into orbit within a couple of months using other launch
providers such as the Russian-built Soyuz rocket which can carry 4 systems in addition to using the Boeing Co. Delta II rockets that took the first eight satellites into orbit. Late 1999 is a six-to-nine month delay from what had been planned as a second quarter 1999 roll out of commercial service. This should push out analyst expectations for the start of revenue and cash-flow generation to early 2000 and provide their competitor IRIDF a short term benefit. Iridium, despite its problems could conceivably be in service about a year ahead of GSTRF. Iridium may be the only game in town for an extra six to nine months, giving IRIDF a competitive advantage.
Red Herring Online September 14, 1998
MARKET UPDATE: IS THIS RALLY FOR REAL? redherring.com
RST SCAN LIST COMMENTARY FOR SEPTEMBER 11, 1998
ORCL(26-9/16, +1 1/16) - even after earnings release, ORCL seems to still have its name plastered across the news pages. It was but a few days ago we stopped whining about this stock and jumped aboard a gravy train. We were talking about ORCL in the very low 20s and were looking for a return to $30, which looks possible. No real need to find out if it was $20 or $21 since we have come a long way from there.
Sept 14, 11:00 am EDT - Sun's Starfire Server and Oracle Set New Performance Record for SAP R/3 With 14,400 Benchmark Users
ERP Solution Provides Unmatched Performance and Manageability With Low Total Cost of Ownership biz.yahoo.com
TECD(48-1/8, +1 5/8) - has managed to rise 2-3/4 over the past 3 trading days alone making this an excellent choice for some profit taking. First introduced on Sept 3rd at 39-1/2 and with some profits taken along the way on this stock. With over a 20% gain in less than 2 weeks, I am going to make a comment that will seem redundant when you get to NETA. Anyone who got into this stock in this price range, you are looking at over a 20% gain in less than 2 weeks or just under a month. You have my official, "take profits when presented" comment. You got a good run for your money and now it is up to your personal greed factor. I have no problem walking away from 20% and looking for another opportunity.
Sept. 14, 1998 - TECH DATA CORP (TECD) Quarterly Report (SEC form 10-Q) sec.yahoo.com
IRIDF(38-7/8, +3 1/2) - Talk about your delayed reaction. I have been stating that IRIDF should have been a recipient of good fortunes relative to the satellite debacle of last week. I re-iterated and reprinted Friday's article yesterday giving a nice nod to the 4 stocks that seemed to have taken the brunt of the abuse from the street. QCOM has reacted nicely off the $43/$44 price post explosion, LOR has held its own since getting beaten up and GSTRF may be finally turning its corner going into today. IRIDF finally got the points it deserved and is already a 10% candidate for profit taking. This one will be monitored closely and allowed to run further with appropriate stops in place. On the subject of satellite communications, the following article from Sept 10th are linked below for your informational desires. Well worth giving the once over.
Satellite Phone Service A Crowded Field CBS MarketWatch: Sep 10, 1998
cbs.marketwatch.com
NETA(40-1/8, +2 7/16) - we seem to be right on track with this stock, garnering yet another 6.5% today on top of the previous day's gains. This makes 7 points in the last 3 trading sessions for this positional stock. We were on top of this stock well before that but the last 3 days were the telling point. I first mentioned this stock on Aug 18th ($32) in passing and it was a TIMELY TOPIC on September 8th at $33. So for anyone who got into this stock in this price range, you are looking at over a 20% gain in less than a week or just under a month. You have my official, "take profits when presented" comment. You got a good run for your money and now it is up to your personal greed factor. I have no problem walking away from 20% and looking for another opportunity. The stories linked below, for the most part, were released by NETA rival SYMC. I think it is important to see how they are intertwined for the moment. IT also highlights why I am not chasing SYMC as a position, even when it appears on the list.
September 14, 6:36 pm EDT SOURCE: Symantec Corporation
Symantec Launches Transition Assistance for Pressurized Dr Solomon's Customers biz.yahoo.com
Monday September 14, 5:19 pm Eastern Time
Symantec Removes Software, Sees Lower Revs
(Reuters) - 9/14/98 Today, Symantec Corp. it is removing a portion of its Norton SystemWorks software package to avoid a prolonged legal battle. The move is
expected to reduce current quarter revenues up to $5 million. SYMC is extracting Norton Uninstall Deluxe from Norton SystemWorks. On Friday, a federal judge issued a temporary restraining order against Symantec as part of a suit, filed last February, in which CyberMedia Inc alleged Norton Uninstall Deluxe used computer code that was copied from a CyberMedia product. biz.yahoo.com
Sept. 14, 8:49 am EDT - ICSA Releases 1998 Computer Virus Prevalence Survey
Despite Increased Use of Anti-Virus Software, Incidence of Infection Increases
biz.yahoo.com
Sept 14, 8:06 am EDT - Network Associates Announces Road Map for the Future of Macintosh Virus Security biz.yahoo.com
APCC(34-15/16, +1 5/8) - no news on APCC but it is still plugging away to the positive. I choose to say this is a net positive of 1 point in a month since this is how far back I go on this stock. Not bad for a major market correction. For those that were looking for bargains on Aug 31st and used this newsletter as a basis to compare against, you could have picked up this stock at $27 for an $8 profit today. Or you could have averaged down on the stock and walked away with a net $4 profit for your endeavors. Neither will be claimed by this author since I chose to be on the sidelines with my commentaries back then. All the credit goes to the astute investor and not this newsletter. We highlighted and you saw the market correction. Given the track record of these groups of stocks talked about, hopefully someone picked up on this. Congratulations to those that did and pass the crying towel for those of us that did not.
NOVL(12-1/16, +7/16) - been following these guys for awhile and have an active interest in whether they can resurrect themselves from the dead. They are giving it a great run for the money and may have actually turned a corner finally. Still worth watching.
Sept.14, 4:17 pm EDT - Novell's Y2K Testing To Be Done By 1999
(Reuters) - Novell Inc. expects to complete testing of its main internal computer systems for year 2000 compliance by mid-1999.
Sept. 14, 1998 NOVELL INC (NOVL) Quarterly Report (SEC form 10-Q)
sec.yahoo.com
NITE(11, 1 1/4) - I do not follow this stock and it is not party of my universe. I was just trying to see if this was the NITE of Market Maker fame and apparently it is. I took the opportunity to read the Company Press Release today and thought it worthwhile for your viewing pleasure.
Sept. 14, 8:30 am EDT - Knight Securities Chooses to Distribute InfoGate( to Clients as a Soft Dollar Service Platform biz.yahoo.com
SLVN(25-1/8, +3) - On Sept 3rd I posted what I believe to be the first comments on this stock. SLVN(22-5/8, +1 1/16) - even with this 5% increase in price, SLVN has been on a downward trend since mid to late July. At yesterday's close, we are back to the Mid January 1998 share price. With no real news, other than old news concerning Sylvan launching On-Campus Testing Centers in cooperation with Microsoft for certification of IT training programs, we might finally have seen the bottom. Keep in mind that June through August were extremely lean times for the SLVN Learning Centers for the school kids that were on Summer vacation. We are up just over 10% in 11 days and we still haven't seen the full financial impact of the back to school increase in enrollment. This has already met profit objectives and will be allowed to run with appropriate stops in place to protect profits. This is much the same as what we did for XIRC, XYLN, MIPS, and VECO just to name a few stocks.
AND NOW A WORD FROM THE RADAR ROOM:
(TSM 11-7/8, +5/16) - Taiwan Semiconductor is seeing increasing demand from its foundry customers for its recently implemented 0.25-micron process and its first 0.18u tape-outs are expected in the fourth quarter. Initial production release expected late in the first quarter of 1999. By the end of 1998, TSMC expects to begin production on a low-voltage, low-power 0.25u micron process for use in mobile applications, as well as on a 0.22u process shrink.
CYMI(8-11/16, -1 7/16) - down over 14% and way oversold. Canon U.S.A announced that 13001 has achieved 0.12-micron lines and 0.24-micron spacing on aluminum using the Canon FPA-3000EX3L 300mm DUV stepper. ASMLF Lithography officially unveiled the wide-field l93nm step-and-scan system, the PAS 5500/900. Both system rely on the CYMI advanced DUV systems.
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Prosearch 5.0* Top Stock Report 09/14/98
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1> ORCL - ORACLE CORP COM .DSO
Price= 26.6 ( 87) AvgVl= 7619.5 ( 99) 1-Dy = 104.1 ( 82)
9> TECD - TECH DATA CORP COM .DLD
Price= 48.1 ( 95) AvgVl= 495.8 ( 96) 1-Dy = 103.4 ( 78)
10> IRIDF - IRIDIUM WORLD COMM LTD CL A .TES
Price= 38.9 ( 93) AvgVl= 387.6 ( 95) 1-Dy = 109.8 ( 95)
2-Dy = 115.1 ( 95) 3-Dy = 112.6 ( 93) 4-Dy = 113.0 ( 94)
15> NETA - NETWORK ASSOCIATES INC COM .INT
Price= 40.1 ( 93) AvgVl= 2835.6 ( 99) 1-Dy = 106.4 ( 90)
19> APCC - AMERICAN PWR CONVRSN CORP COM .ELE
Price= 34.9 ( 92) AvgVl= 879.5 ( 97) 1-Dy = 104.8 ( 85)
26> NOVL - NOVELL INC COM .DSO
Price= 12.1 ( 54) AvgVl= 4208.6 ( 99) 1-Dy = 103.7 ( 80)
39> NITE - Knight Trimark Group Inc COMM .INV
Price= 11.0 ( 47) AvgVl= 413.7 ( 95) 1-Dy = 112.8 ( 97)
52> SLVN - SYLVAN LEARNING SYS INC COM .EDU
Price= 25.1 ( 85) AvgVl= 654.8 ( 97) 1-Dy = 113.5 ( 97) |
