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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Ausdauer who wrote (4495)	1/25/1999 10:12:00 PM
From: Don Hess	Respond to of 60323

Thread - FWIW: I was concerned that I'd suffer through yet another "beat estimates, lose value" phenomenon based upon expectations of excess built in to pre-news pricing. But I think the 1Q 1999 comment of not only continued but increasing revenue by Eli will float the boat. After a few hours of digestion, I wind up very pleased with the news of the day, and am happy to be long. - Don

To: Ausdauer who wrote (4495)	1/25/1999 10:58:00 PM
From: Alan Lynch	Respond to of 60323

Is the boat floating yet? What can you say about the outlook for Sandisk over the next quarter, then the next two, three, four quarters after that. Absolutely outstanding! I was going over some previous posts particularly last March/April prior to the serious share price depreciation and was struck by the familiar optimism in the future direction of the company. I was dreading a similar occurrence. Eli presented to shareholders (then) only what the street was asking, nothing more. This is evidenced by his ability to play with "backlog" to meet estimates. Hey, this time he beat estimates by over 40%. What does that tell you? The only indication of any negative news (if you want to call it that) was that revenues were flat in Europe. Flat, not down. They use a lot of mobile phones over there, don't they? A major point in the cc identified the calibre of customer Sandisk has acquired. Accounts receivable are higher AND the company has no degradation in this item. What a fantastic feature of this company, particularly when one considers the high level of foreign customers. This quarter's results spoke volumes for the quality of the company. The customer base is broadening - 64% of revenues were from the top 10 clients. Previously this figure was 75%. Eli identified Multimedia cards (mmc) as being adapted as the standard for many mobile phone companies and growth in this product as "faster than expected". He also said the market for MP3 music players was "growing like wildfire." Does that sound like the comment of a conservative executive? The company is certainly well positioned to deal with a sudden increase in product volume with the announcement of mature, high volume products being assembled in China (subcontracted). New products, customer specialty prod's with low volume will be developed in the US. Looks good to me. I am staying for the ride. Regards,

To: Ausdauer who wrote (4495)	1/26/1999 12:29:00 AM
From: Daniel Joo	Read Replies (1) \| Respond to of 60323

Hard numbers... Balance Sheet remains strong and is even stronger. Current liabilities are down over $8 million, investment in foundry up $11 million and yet cash position remains basically the same. Cash balance alone covers short-term liabilities. MB shipped increased significantly (number thrown out was 40% higher than any quarter on record) and yet gross margins improved and cost of sales increased only 1.5%. G&A expenses are down 12.2%. Inventories are down significantly - good thing they built inventories last quarter in anticipation of demand. And Royalty revenues look real because deferred revenue amount stayed the same. Negatives - revenue number is down. This is a financially conservative company - interest income is only 1.3% for the quarter - those are terrible returns on cash and short-term investments. They have to invest their money somewhere - preferably in the business. No reason to hold that much in short-term investments that are generating such terrible returns. Investing that money internally or elsewhere to generate better returns is their responsibility to shareholders. I can take that money and invest it in money markets/treasuries and make those kind of numbers. Who is their CFO? He/she is doing a terrible job. If they can't find investment opportunities, the money should be returned to the shareholders in the form of dividends. With demand strong, pricing pressures will ease. It looks like the bad is behind us. Margins will improve significantly. If the stock price declines, I will buy more.