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Technology Stocks : HDCO - Why sudden dip? -- Ignore unavailable to you. Want to Upgrade?

To: rich evans who wrote (557)	3/12/1999 11:28:00 AM
From: kolo55	Read Replies (1) \| Respond to of 572

I sold my shares into the rally two weeks ago. When it moved up above 36, I pulled out with 90% of my position, leaving me with just 500 shares. I didn't understand the rally (possibly caused by an upgrade when the stock dipped below 30 the previous week). This stock certainly is volatile. My concerns revolve around the company ever getting the margins back up and resuming some revenue growth. (I've heard they pushed a lot into last Q, trying to show some good numbers.) I also sold intending to buy JBL when it dipped to 30. I didn't do it at that price, but picked up some FLEX at 33 and some JBL when it was rallying (spiking) one day. I simply wanted to put these funds into several companies that I know are going to see strong revenue growth over the next year. Selling HDCO in the high 30s and buying JBL and FLEX in the low 30s seemed sensible to me. Eventually the board makers will turn, but look at the year to year revenue $$ decline in board sales at this site (at the bottom of the page): ipc.org The decline in revenues must be due to pricing pressures. Hadco has said that pricing may be leveling at the last conference call, but I'm not sure we ever see the historical margins in the board business that we saw several years ago. So we have a company with declining revenues due primarily to pricing pressures, suffering through a period of overcapacity and low margins, with no real indications of whether they'll get back to historical levels. Also the company's fairly high interest debt used for the last several acquisitions is weighing them down. OTOH the PSR is in the range where the stock is oversold by most measures. It certainly is an interesting turnaround play, but my guess is that they won't see a real recovery in their business until next fall. And it could be an interesting trading vehicle since the stock is so volatile. I'm simply pretty much giving up on the board makers... I just haven't made any real money in these over the last several years , and its diverted attention from better performing companies. And this probably signals a buy signal, since I'm capitulating. If the stock drops to the low 20s, and the rest of the sector rallies, I reserve the right to change my opinion. Paul