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Wednesday, January 14, 2009

Tech Roundup – January 14, 2009


Linear Technology (LLTC)

Company guides down 15-20% for March quarter. Turns will have to pick up in February and March to get there.

The Skew: Not all that surprising as the fuzzy mean expectation seems to be for 20% declines to outlooks for semis. I had suggested stock was a short into the report in Monday's piece – I'd take it off prior to the conference call at 11:30am.


Semiconductors (many symbols)

Digitimes ran a series of articles yesterday about pickups in business at PCB manufacturers, foundry customers with handset focus, LCD panel orders. Citigroup defended their positive call on Taiwan Semiconductor, citing prior stock recoveries as correlated to utilization bottoms at foundries. Merrill Lynch points out that December monthly sales of the 13 Asian distributors they cover declined 7% m/m which is better than the historical average of down 15%. November was far worse than the historical average, too.

The Skew: A pickup from zero is probably what we're talking about. Business has been utterly dead. Semis are hand to mouth. Any kind of restocking is a good sign but OEM demand needs to hold in for this quarter and inventories need to show some sign of decrease. Citigroup is right, the semis start to trade better on utilization pickups. We're halfway through January – seems early to draw conclusions. As far as Merrill goes, I don't think a slightly less bad month after a horrendous one means much heading into seasonal weakness. I'm waiting for more information. It would be great to have a solid reason to buy these stocks. Qualcomm (QCOM) is my preferred long play in the handset semi space if you must – they have fat margins and monopolistic tendencies.


Yahoo (YHOO)

Carol Bartz confirmed as their new CEO.

The Skew: Bartz led a resurgence at Autodesk several years ago. She is likely to do significant cost cutting at Yahoo. A search deal with Microsoft is likely as a core tenet of that plan is massive layoffs. While the long-term impact of a Microsoft search deal is potentially extremely dilutive to the Yahoo brand, analysts and investors have been clamoring for it. Despite Bartz' protestation that Yahoo will make its own decisions, resistance to the Microsoft deal is futile. All your search are belong to us.


Adtran (ADTN)

UBS sees risk to the current quarter and the 2009 outlook. While current business is iffy, Adtran would be a disproportionate beneficiary of a broadband spending bill – 95% of their business is focused on the US broadband market.

The Skew: No hurry to own this but worth keeping on the radar for post-weakness buying.


Nortel (NT)

According to the Globe and Mail, the company may file for bankruptcy protection.

The Skew: They're not bankrupt yet? Er. Just checked the tape. Yes they are.


5N Plus (FPLSF)

Reported better Q2 results – 18.1 mil versus expectation of 16 mil.

The Skew: Company has correlated to First Solar (FSLR) in the past – FSLR is their largest customer. Conference call is at 10am. I want to say buy FSLR in front of the call but I suspect 5N Plus could have a murky outlook. FSLR guidance was contingent on a functioning credit market and I don't think that's what they've seen. More after the 5N call.



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