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Arrow Electronics, Inc. Message Board

  • monrio1 monrio1 Dec 11, 2001 3:05 PM Flag

    Why The Runup For ARW + AVT

    So the semis take off like raped apes.

    Intc and Amd, whose processor business seems in recovery, do not sell processors through the distribution channel.

    In Spring, 1999 when the semis were gaining full stride in real demand, distribution lagged (ARW traded in April, 1999 for $14).

    PEs for ARW in April, 1999 were held down in the 12 to 15 range.

    Now, a similar PE in place at a time when semis are recovering would rely upon $2 to $2.50 per share in earnings for ARW.

    Instead, ARW trades @ 29.85 based upon what?

    Certainly not stock price history in a comparative emerging semi market. In fact, the semis are not emerging yet in real demand, which makes the case even more difficult to support ARW @ these prices.

    ARW must be managing their internal costs well.

    Is that what mgmt is saying?

    (Hi DP.)

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    • Perhaps you should make a second query.

    • huh? INTC and AMD don't sell processors through the distributor channels? Are you crazy? INTC sells through distribution quite a bit! Gates/Arrow, one of Arrow's subsidiaries is one of Intel's largest distributors.

      AMD has other distributors too.

      • 2 Replies to jestme123
      • I represent a manufacturer who buys quite a bit of product from Arrow. The other day we were visited by some "super sales" types who told us that Arrow had a new product. They want to sell us information about the status of parts and plans for their manufacturers to obsolete them. We weren't impressed.

        Then we were told that some "big wig" had conceived this and plans were that this information would generate as much sales as the distribution.

        My comment was " this might be true, but if it is it only because Arrow will loose their distrbution business.

        Then I asked how many customers they had presented this to and the response was over 20. Question? Did you get a postive response out of any of them? Answer. NO

        Any person who conceive this idea has a problem. A bigger problem is the management that would let it be sold in the company.

        My quess is this year Arrows competitors will get some of our business and who knows what will happen the year after that.

      • I think if you look at the processors sold by Arrow it would be based upon systems sold that had processors in them, not the chips alone, and these systems are not OEMd by Arrow, but distributed. Therefore the sales of Intel processors are counted in the sale to Arrow's OEM.

        If you want to look at Arrow for health, look at the chips that Arrow does distribute for Intel and Amd.

        These would be the flash memories in the main, and some controllers, not the processors.

        The point remains valid that upturns by Intel and AMD in processors should not reflect directly on Arrow mainstream chip business.

    • I assume there's new interest because of the massive reduction in staff that's about to happen.

 
ARW
58.15-0.06(-0.10%)Jul 31 4:06 PMEDT