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Tech Earnings Watch: SanDisk, ADTRAN, Intersil, Altera


The week's notable names.

Earnings kick off this week for a whole slew of tech names. As with most quarters I won't be playing a whole lot of pre-EPS trades but I do feel that this quarter may set up for larger up moves than we have seen on any sort of positive news on specific stocks. Additionally, this may be a better time than we've had for a few quarters to take selective positions after reports, regardless of the near-term news. This is due to the pervasive negative sentiment as well as the fact that analysts have been tripping over themselves to lower estimates and ratings.

To reiterate a point I made last week, I keep looking at the divergent reactions to General Electric (GE) versus Foundry Networks (FDRY) and thinking that this could be the microcosm for the quarter.

Likewise I feel that for the throngs of the downtrodden in tech, much of the negativity is embedded in stock prices and not in balance sheets or future cash flow generation. It all centers around the almighty next quarter EPS guidance.

On PSR and other balance sheet driven valuations metrics, hosts of stocks are reasonably valued and many are just downright dirt cheap.

Some of the week's key reports are:

Monday: Infosys (INFY)

Tuesday: Intel (INTC) and Seagate (STX)

Wednesday: eBay (EBAY) and IBM (IBM)

Thursday: Amphenol (APH), Cypress Semiconductor (CY), Nokia (NOK), SunPower (SPWR), Google (GOOG) and SanDisk (SNDK)

Additionally, we have quite a few chip companies reporting this week and I may be most interested to hear their perspective on the current conditions. These include Intersil (ISIL), Linear Technology (LLTC), Altera (ALTR), ASML (ASML) and Teradyne (TER). If reports are just muted and not outright dire (INTC included), then we could see upside across the SOX and a retest of the recent break-out.

Another company of interest is ADTRAN (ADTN), as both a potential investment as well as an indicator for other investments in optical equipment group.

Of the above companies maybe the most intriguing on the long side over the intermediate to longer term is SNDK. As I've written, its IP portfolio is barely recognized as a potential catalyst and given the current stock price, you are getting SNDK's future IP and product pipeline revenues at a very good price. The current quarter is probably fine, but guidance is a total coin toss. Any retest in the low, low $20's would be ideal but too many people may be recognizing that currently. We may get another chance around $23 if guidance is poor.
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