This company has 5% growth year over year and all they can say about 2004 is that is will be better than 2003! What a joke!
And how many of you losers out there are going to tell us that this POS deserves the 300% run up since March or the 12 x's sales status. This is a 6-7 dollar stock at best like VTSS or AMCC.
If it doesn't get hammered tomorrow, watch the slow burn down over the next 3 months. There is no upside here and the smart money knows it. Cheifs at CSCO and LU made a statement this week that said IT spending had not improved nor was an improvement in sight. Just as IBM confirmed yesterday. This baby is nothing but a bunch of fluff.
I think seasonality is a BIG factor here as companies are building inventory for the Xmas selling season. Whether J6P answers the call and continues his spending spree is the big question I have. Will the Shrubmeister do another helicopter drop of dollars from heaven to J6P if the recovery proves unsustainable?
I can believe the seasonality possibility; that certainly applies to many semi companies. Strong demand in China would also be a factor. Labor costs probably aren't an issue as mfg is high fixed costs created largely by equipment purchased from US companies.
Unless the world-wide economy goes into the tank, I don't think there is much doubt that there are going to be capacity issues over the near term in the semi-conductor sector. Of course the products that are generating that demand are not what PMCS sells so they aren't going to benefit all that much. Some price increases, but their costs will increase as well because they have to contract out mfg.
The decline in the dollar and possible further declines are an interesting factor. I think many US companies will benefit, how PMCS will be impacted isn't obvious to me. They will be more competitive on the world stage because they are paying their workers primarily US dollars, but then again the costs of contracting with TMCS and UMC will increase so I don't really know the final impact.
Whatever the impact, it is sure hard to imagine the present value of PMCS's future cash flows coming close to their current market cap.
It is so obvious that IT spending is still in the dumps and yet everyone is pushing the related stocks up through the roof.
Look at all the next generation fiber companies that went like the dodo; xoxo glbx wcg wcom 360 with lvlt and q barely hanging on.
There are no hords of cash (created by debt) for the like of CSCO, LU, NT, JDSU, CIEN, ect. and therefore no hords for PMCS BRCM AMCC VTSS CNXT etc. We will never see the growth explosion we saw in '98 - '00. The well has dried up. From here on out we get some steady growth at best until they come up with something new. There is still enought dark fiber out there to service the existing population for a few more years to come.
All this hype is just that hype. It will come back to fundamentals. It is only a matter of time and time gets shorter as each earnings report reveals the lack of super growth everyone is dreaming of.