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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (5551)	2/13/1999 10:23:00 PM
From: tom pope	Read Replies (1) \| Respond to of 9256

Does anybody know who is Gateway's main supplier? TIA Tom

To: Stitch who wrote (5551)	2/14/1999 2:59:00 AM
From: Z Analyzer	Read Replies (2) \| Respond to of 9256

Would love to see more interest in Hutchinson now that the price has pulled back. 1) I believe HTCH is cheaper on forward earnings than the drive companies. For example, they are forecast to earn $.70 in June versus .53 for SEG and $3.05 in calendar 1999 vs $2.15 for SEG (Montgomery estimates). 2) I suspect HTCH could surprise nicely again this quarter. December over Sept profitability INCREASED by an astounding 25% on the gross margin line and $1.25 for net income. March qtr profitability is forecast to increase only to $.56 vs $.52 in December and yet TSA production should grow as much this qtr as last. Production per TSA unit in January was up to 200k per week versus an average in the Dec qtr of 159k. That's already a 25% improvement in a business with very high incremental gross margins (around 75%). 3)TSA production should further double between March and Sept to over 10 million per week. As I've said before, how many companies are virtually assured of achieving increasing volumes, ASPs, revenues, gross margins and profitablility over the next three quarters? 4) HTCH isn't seeing INVX or 3M buying even evaluation quantities of suspensions which further indicates the obvious-that flex circuits aren't taking the world by storm. In fact, INVX has not completely ironed out their contract with HTCH which, I believe precludes shipping any FSA produced on their machines. 5) HTCH just raised $200 mil despite becoming cash flow positive last qtr including large cap X. Starting to get TSA into Maxtor pretty well and seem to think SEG is coming around to the total cost approach even though there are still no scheduled programs. And they still hope for Fujitsu opportunities. Their desire to be able to fund these opportunities if or when they arise is indicative of their confidence level. 6)All HTCH competitors are working (so far not successfully) on producing TSA with HTCH produced flexures. 7) HTCH hears that NHK outsouces most aspects of CIS production and is not happy with the program (but working hard to learn to produce TSAs-a non-tivial task even with purchased componenets). 8) HTCH holds broad patents on micro-actuation-probably the next wave of the future with three companies so far having "closed the loop". I hope to find out what I can about the competing wireless technologies by talking with HTCH's competitors this week (that is collect as much misinformation as I can), but it looks increasingly as if dominating the wireless business with TSA becoming the industry standard. The absence of visible competition at this stage in the game speaks louder than words. As I have been saying, HTCH is in a business we can all understand, I believe that verification of the TSA trend is well within our capabilities and that if HTCH can dominate this growing business, that we can look for significant profit growth and multiple expansion. Would love to see more people on board and interested in HTCH. -Z