Joe Osha Quotes (31 Quotes)

We've seen investment in capacity go up quite a bit and we had a scare this summer with wireless. So you can make a case that the business is in trouble. We try to focus on slightly longer-term fundamentals. The relationship between spending and revenue in this business is still reasonable. Visibility is still good. Pricing is good. Let's not forget, wireless handset demand is growing 50 percent over year-on-year. So with stocks down a bit and the fundamentals still solid, we though it was time to declare the mid-cycle correction over.

We admit to some difficulty in seeing what supports consensus earnings estimates.

Although one could argue that Analog Devices' upbeat outlook merits raising the number even further, we would prefer to wait and see how growth shapes up over the year as Analog Devices catches up with its backlog and the current feeding frenzy for Analog Devices products dissipates.

We think that the investment community has bought into the idea of a second-half recovery, and that's probably going to happen.

Intel's mid-quarter update was generally in line with our expectations, which supports our checks suggesting that the PC market is tracking normal seasonality in the back-end loaded third quarter.

Valuation for the stock appears significantly high for a company with a sustainable earnings growth rate of 10 percent to 15 percent. We have difficulty imagining any second-half recovery that could raise earnings, and investor expectations, to a level sufficient to keep the stock moving up.

Just because Intel has faltered does not mean the company is now incapable of executing.

We think it's likely that the stock will see a short-term rally on relief that the outlook has not deteriorated further, but the absence of bad news does not constitute an argument in support of the stock... we struggle to understand the upbeat consensus outlook for the fourth quarter.

The concerns that underpinned our mid-cycle correction thesis are beginning to dissipate, and semiconductor stocks globally are well below their March highs. We would advise investors to begin buying semiconductors more aggressively.

Texas Instruments' decision to buy analog specialist Burr-Brown fits well with the company's stated objective of building its presence in the analog business. Despite the somewhat rich valuation for the deal, we think that the deal makes sense for TI. We reiterate our intermediate-term and long-term buy ratings for the stock.

While many of the stocks in this group are already down by 50 percent over the past several weeks, we believe that inventory concerns, coupled with telecom service-provider capital-spending concerns, will weigh on the group for the next one to two quarters. We note that the group in aggregate still has the highest valuations in the semiconductor business, even after the recent decline.

For now, we're staying with the neutral intermediate-term rating on AMD's stock until we see how the company weathers the Northwood launch. We are still long-term strong buyers of the stock -- even if AMD suffers at the hands of Northwood it will not plunge as deeply into loss as it has during past Intel offensives.

The disappearance of Vista from the holiday 2006 selling season is likely to have a bigger impact on semiconductor companies than a simple few-week delay might imply.

Intel's status as an industry bellwether has allowed the stock to move with the industry in the past.

The clock-speed wars have gotten to the point where it's not clear who benefits. It's certainly not the customer who wants to buy 700 MHz stuff at reasonable prices. It has been a problem, but availability has improved over the past four weeks or so.

The rate of decline for both the flash memory and communications business in the second quarter could be more dramatic than the overall top line, leaving it to the microprocessor business to pick up the slack.

The semiconductor sector in general is in very good shape the industry hasn't invested enough in capacity and that is actually very good for chip makers. Intel is often treated as a proxy for the chip sector, so the chip sector is doing well and so is Intel.

I'd be a lot more comfortable with the group at 20 times 2003 earnings.

The reason I am positive on the stock right now is the fact they are pushing into servers, workstations -- the things that are being driven by growth in the Internet. That is a big market that Intel can dominate, I think, pretty quickly.

What we see happening is a bottoming to the rate of change in the semiconductor business, which has been negative and less capacity being added by the fourth quarter, which is also good. So, although companies themselves are still very conservative we think that the worst is past in terms of the downturn here.

We wrote last November that Sony's design choices for the PS3 had resulted in an expensive and difficult-to-manufacture product, and we think that we're seeing the consequences of those choices play out now.

Despite our conservative remarks on margin compression and pricing intensity, we continue to believe Intel will meet our revenue forecast and reiterate our intermediate-term neutral and long-term accumulate rating.

We continue to believe that we are in the second year of a 5- to 7-year investment cycle in Internet infrastructure.

They have a pretty good idea at this point what they're going to ship.

Although the company is executing in terms of cost control, we think margin contractions at the gross margin level will continue through the second quarter as well, which we had not factored in.

We think that the most interesting potential for National lies in the wireless market, where the company has the potential to substantially increase its revenue per phone.

Given the challenges Intel faces currently with its business model, we think the stock needs to trade on a lower multiple of 2003 earnings to be attractive.

What we can say, however, is that expensively valued stocks are poorly prepared for surprises like the one Intel delivered yesterday.

In posting the weakest Q4 revenue result and Q1 outlook since the bursting of the bubble, Intel has made it clear how much competitive ground the company has lost to AMD. The extent of the losses has exceeded our expectations.

It is very hard to find any evidence of a real end to the upturn that began in late 1998. Although we see little to support semiconductor stock prices during the next two months, we strongly believe that the sector will be hitting new highs before the end of the year.

At 27 times our 2003 earnings estimate Intel is still expensive relative to its growth prospects and its own history.