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Technology Stocks : Semtech (Nasdaq:SMTC) -- Ignore unavailable to you. Want to Upgrade?

To: John Morrison who wrote (637)	11/8/1998 10:05:00 AM
From: Kelvin Taylor	Read Replies (1) \| Respond to of 1225

John and Jeff, The 200 DMA is certainly impressive from a technical standpoint. The last time SMTC closed above 24 was on May 14, '98 so its been a long time coming. However, the earnings outcome will be the real deciding factor on how the price will hold or fall based on year to year comparisons. The current EPS estimate for the quarter is $0.18. Same qrt last year the company reported $0.26 and beat estimates by more than 13%. SMTC may surprise by beating 0.18, but will likely fall way short of the number for qrt. '97. The year to year comparisons, both for the quarter and year will not be as impressive and buying support may dry up. 1999 yearly EPS are estimated at $0.84 vs. '98 earnings of $0.98. Institutions have recently taken interest in SMTC and the price appreciation has been speculator since reaching a bottom in August. But as with any stock which has doubled in only a couple of months, the risk of profit-taking is looming. IMO the stock is overbought and is due for a pull back. The current price I think already reflects positive numbers, upgrades in the sector as a whole and when the company reports it will be interesting to see how the stock responses. The 52-week high is 30 ¾. I don't see how that could be eclipsed if the numbers are so much lower than the same period a year ago. Sales and inventory will be looked at closely. Are the margins improving? Last year the price reached a high of 27 ¼(split adjusted) on December 8. By year-end the price had fallen to 19 5/8 despite a better than expected report in November and the announcement of 2:1 stock split. Plus January was pretty flat too. Right now I have no position in the stock. I'm still bullish on the stock longer term, but I want to see the numbers first before buying in. Good luck. Kelvin