Waiting to Buy
I haven't pulled the trigger yet but I think the pieces are falling into place. I need to study the housing report, but the signs are that we have mostly bottomed.
I am very shocked by the TRID downgrade. The analyst says that he expects a lower revenue, whereas TRID raised guidance 4 weeks ago. Meanwhile TRID gained a major customer. All in all, I have been incredibly wrong on TRID. It's very puzzling.
* Circuit City has announced that sales of flat screen TVs are strong
* The analyst who downgraded TRID also said "In our view, Trident continues to be the strongest among display semiconductor competitors with its dominant positions at tier one customers and product road map. "
This is the message: sales are going through the roof, TRID is the best positioned supplier, but we should downgrade.
Anyway, I am watching certain stocks today, but everything still feels like it's in a trading range. I'll post what I buy
I am very shocked by the TRID downgrade. The analyst says that he expects a lower revenue, whereas TRID raised guidance 4 weeks ago. Meanwhile TRID gained a major customer. All in all, I have been incredibly wrong on TRID. It's very puzzling.
* Circuit City has announced that sales of flat screen TVs are strong
* The analyst who downgraded TRID also said "In our view, Trident continues to be the strongest among display semiconductor competitors with its dominant positions at tier one customers and product road map. "
This is the message: sales are going through the roof, TRID is the best positioned supplier, but we should downgrade.
Anyway, I am watching certain stocks today, but everything still feels like it's in a trading range. I'll post what I buy
posted by Andrew at
10:43 AM
6 Comments:
Thought on TRID. Analyst downgrades so that the stock drops in price, their investors load up, TRID blows earnings through the roof, analysts' "investors" rejoice? Thoughts??
Do you try to quantify your thoughts and see if the valuation already includes all the upside your are talking about?
May be this stock is downgraded on a valuation basis not on fundamental basis.
Does TRID only play in the LCD space? The price of plasma tv's is dropping and Sony's SXRD technology is superior to the LCD technology, so unless TRID is diversified in what technology it provides, I can understand the downgrade. However, if TRID supplies parts for the SXRD, than I am a believer in the stock.
6/28,29 for interest rate. would bernanke say anything to trigger another round of big drop ?
Looking at the forward PE there is no valuation basis for the downgrade.
CIBC it seems came out with a counter report. They are still bullish on TRID. I feel that TRID is like Apple in the early days of the iPOD. All you have to do is look at what's hot in the consumer market. People want new LCD TV's. They are the hot item. The downgrade made no sense to me.
Plasma is nice, but the high energy costs and weight do not make it the preferred TV solution. Not to mention strong questions about plasma's lifespan. Sales volumes show the flat screen favoritism.
As for valuation, the numbers will show a 27 P/E after the next release (assuming they only meet the earnings expectations). They have a forward P/E of 18.
Expectations are about the 2H 2006, not this quarter. In fact, analysts just last week raised expectations for this quarter.
Suggesting that they have higher competition is wrong imho. They keep winning business away from the only competitor out there: GNSS. GNSS can certainly apply pricing pressure by dropping prices, but that only goes so far. People buying $2000 TVs are buying a great picture, not an ok picture. Maybe there is margin pressure, but I doubt it matters much.
The only weak points are a slowdown in flat panel TV sales and a potential weak spot with the lack of a solid single chip including HDTV (they have a dual chip solution).
But worst case scenario - additional 10% pricing pressure over the next 4 quarters. That's a P/E of 20. How about a 20% drop in prices? That's a 22 P/E.
This company is CHEAP!
Sadly, the option trading heat will undermine any attempt to sell the company. Nobody buys a company in litigation.
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