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

To: Frodo Baxter who wrote (6148)	4/26/1999 10:12:00 PM
From: Z Analyzer	Read Replies (2) \| Respond to of 9256

<<Huh? Inventories have been incredibly lean for a while. It's oversupply, nothing else.>> My suspicion is that one of the reasons quarter end inventories are so lean is that cut backs are made immediately prior to quarter end to dress up the books since inventory turns and balance sheets receive so much focus today. If you are a supplier to a firm managing its inventory on this basis, you experience a short-term drop in demand. I agree with you that the fundamental problem the drive manufacturers face is excess capacity in the desire of all firms to grow market share. (Hard to believe they want to grow the desktop business when nobody makes later today). For this reason, I maintain my long-term negative bias towards the disk drive manufacturers, but find Hutchinson extremely attractive. Hutchinson was foremost in my mind when I mentioned an inventory correction. That clearly was a factor for them as supply caught up with demand and double booking and maintenance of excess TSA inventories came to an end. I would expect to see a pickup and demand shortly as those inventories are worked down. -Z