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

To: Stitch who wrote (4524)	1/22/1999 8:52:00 AM
From: ScatterShot	Read Replies (1) \| Respond to of 5058

Besides that, when you've been holding this stock since 24.375 the only thing more entertaining than the pit is our great earnings report and generally uplifting sector. With Stitch in the pit and Lawrence in the stands, I suspect she'll be a short bout.

To: Stitch who wrote (4524)	1/22/1999 9:49:00 PM
From: Alain Dubreuil	Read Replies (1) \| Respond to of 5058

Value Line perspective Trends in the disk-drive industry may finally be turning favorable for Read-Rite. Personal computer manufacturers entered 1998 with excess inventory, which forced then to trim manufacturing plans, dampening demand for components, such as disk drives. And, much of the pickup in demand during the year was for less expensive machines, which squeezed component manufacturers as PC makers fought to buy supplies at the lowest possible price. Now, though, the industry appears to have stabilized. Excess inventory has been worked out of the pipeline and demand for components is again rising. Read-Rite is positioning itself to take advantage of the upswing. Read-Rite's fiscal '98 results were also hurt by its transition to magnetoresistive (MR) technology. That transition has now been completed, and the company also has been working to cut time to market and to increase yields and product quality, which has increased its competitiveness. It is now supplying MR heads to Maxtor, Western Digital, and Samsung. Moreover, since Quantum has stopped manufacturing MR heads, Read-Rite would appear to have a good chance of picking up some business from that company. True, Western Digital is working with IBM on a new product, which probably will reduce demand for some Read-Rite heads. But, the company isn't resting on its laurels. Its efforts to develop Giant MR heads (which will boost storage densities) is moving ahead, and it is also making progress on its optically assisted products. The company likely will return to profitability in fiscal 1999 and net $1.75 a share within 3 to 5 years. Read-Rite shares have had a strong run since our October report, presumably as investors took note of the company's improved prospects. The stock's current price discounts the good earnings snapback we project by 2001-2003, though. And the issue is quite risky. The company operates in an industry marked by wide fluctuations in profitability and its customer base is highly concentrated. George A. Niemond January 22, 1999 Alain