3SOF

Well, theres me... I'm in since 42.

Great pick Michael.

Hi Michael, I was watching from about $40 and jumped with your recommendation yesterday.
Thanks very much Mike.

uc.

Ps. Got in on CTE recently as well. Bit of a down day today.

awesome day for KOMG 1
KOMG: Volume Spike; 41% > 20-adsv, Stock +7.17%
Friday , March 03, 2006 13:25 ET

This is the 1st VOLUME alert for KOMG in the past 7 calendar days.

Trading for Komag Inc (NASDAQ NM: KOMG) has been heavier than usual in today's session. By 13:25 ET, the stock had already traded 1,425,800 shares via 3,041 trades. The cumulative volume is 41.41% above its 20-day average of 1,008,300. Normally the stock experiences around 2,274 individual trades per session.

So far, today's volume surge has caused a net rise in KOMG's stock price. At the time of this alert, the stock was trading at $53.990, up $3.610 (+7.17%).

One year ago, the Company's shares closed at $21.800. The price has gained more than 147 percent since then.

Over the last 10 trading session KOMG has traded in a range between $46.070 and $51.400 and is currently trading 5.04% above its 52-week high of $51.400 set on February 22,2006 and 176.45% above its 52-week low of $19.530 from April 18,2005.

In the previous 3 sessions, KOMG trading has displayed a mixed trend. Closing results have been as follows:

March 02, 2006 --- closed at $50.380 up $0.340 (+0.68%) on 1,029,200 shares
March 01, 2006 --- closed at $50.040 up $3.200 (+6.83%) on 1,242,000 shares
February 28, 2006 --- closed at $46.840 down $0.750 (-1.58%) on 1,161,800 shares

I will of course continue to hold KOMG, thanks for the article Michael.

Oliver

QuoteKomag (KOMG) added 3.10 to 53.48 in heavy trade. In late January, the data storage company reported its third straight quarter of triple-digit earnings growth. Mutual fund ownership has also increased from 96 funds in March 2005 to 149 in December. Its Technical and Overall Ratings of 99 from IBD Stock Checkup ranks it No. 1 out of 24 stocks in the Computer-Data Storage group.

No. 1 in one of the hottest sectors around

Mike

I love it:

Komag sees 1st-qtr revenue at high end of outlook
Mon Mar 6, 2006pm ET170

LOS ANGELES, March 6 (Reuters) - Komag Inc. (KOMG.O: Quote, Profile, Research), a maker of computer disk drive components, said on Monday it expects revenue in the first quarter of 2006 to be at the high end of its previous outlook for a 2 percent to 4 percent increase over the prior quarter.

cheers
O.

I see that guidance report, and then the stock drops pre-market. I just don't get it sometimes.

uc.

 

1)
KOMG: Matrix Cuts to Hold from Buy; Analyst Notes
Tuesday , March 07, 2006 08:58 ET
Issuer: Komag Inc (NasdaqNM: KOMG)
Analyst Firm:  Matrix
Ratings Action: DOWNGRADE
Current Rating: Hold (from Buy)
Analyst Comments: The firm's downgrade is due to valuation.

2)

WDC: Kaufman Bro Cuts to Sell from Hold; Cuts Tgt to $20 vs $22; Analyst Notes
Tuesday , March 07, 2006 08:50 ET
Issuer: Western Digital Corporation (NYSE: WDC)
Analyst Firm:  Kaufman Brothers L.P.
Ratings Action: DOWNGRADE
Current Rating: Sell (from Hold)
Target Price Action: DECREASE
Target Price: $20.00 (-9.09% from $22.00)
Analyst Comments: The firm's checks suggest a major price battle began as the various HDD players in February, and that this resulted in price declines.


3)
Disk Drives Lower on Pricing Fears, Downgrade
Tuesday , March 07, 2006 09:39 ET
Hard disk drive manufacturer Komag (KOMG) today updated its Q1 outlook to the high end of its previous 2-4% projected sequential advance, followed by another sequential revenue gain in Q2. However, KOMG (-4.5%) was downgraded by Matrix to Hold from Buy on a valuation call. Kaufmann Brothers noted HDD price declines of 10-12% since early February. The firm cut Western Digital (WDC -3.9%) to Sell, but reiterated its Buy rating for Seagate Technology (STX -1.9%). HTCH (-1.5%) and MXO are also opening lower today.

Hmmmm....... Doesn't this really show how irrational the market is.

Lets assume that there is an upcoming price war between the HDD producers.

It is a few years ago I studied economics but as fare as I rememver demand for a product increases if the price is lowered. (correct me if I am wrong  )

Now if you as KOMG are making parts to HDD's which already is in short supply any increase in demand should kind of benefit you shouldn't it?

So why is KOMG down today after they have just given very strong guidance.

Hmmmm..... I guess this is a good buying opportunity!

Mike

yahoo quotation:
Matrix Research is a real dumb idiot. It downgraded KOMG on Dec 13 from Buy to Hold when it was trading at 36. It is downgrading from Buy to Hold again. It cannot even remember what it did last time. If you bought when it downgraded at 36, you would have made 50% profit in just 3 month.


Analyst 70 slides presentation:

http://www.komag.com/investors/presentations/06mar_analyst.pdf

Agenda:

HDD and Media Review
Market Overview
Capacity Expansion Plans
Technology Review
Financial Review
Q&A

enjoy it !!
cheers
Oliver

Very strange:

Matrix has downgraded KOMG form Buy to Hold on Dec 13, 3 month ago.. And it is repeating the exactly the same downgrade with the same explanation.
How can it downgrade twice from Buy to Hold?

Short attack supported by Matrix??

cheers
Oliver

SB MANSKY KOMG report:

We are maintaining our Buy rating and $56 price target on Komag shares based on
our views that our above consensus estimates continue to carry meaningful
upside potential on shares that are currently trading at 11x CY06 EPS. That
said, the disk drive group as a whole has performed admirably since the
beginning of December 05, culminating with a 7% appreciation in Komag last
Friday off a short squeeze. Although the fundamental story remains very much
intact, in our view, we suspect investors will be keen to lock in profits ahead
of any perceived deterioration in sentiment. With little by way of incremental
news flow expected from the industry prior to earnings (mid-April) leaving only
the alarmist commentary recently raised surrounding disk drive pricing, the
shares will likely remain range bound near-term. We look to this as an
opportunity for accumulation. Our sensitivity analysis suggests CY06 EPS
upside to ~$4.80 with a 12-13x multiple range implying fair value of $58-$62.

* Supply / Demand Remains Attractive

The company reiterated its intention to exit the current year with capacity at
43M units/quarter, up from 30M at the end of December 2005. Inclusive of the
updated outlook per the 8-K filing ahead of the meeting, we suspect management
is targeting ~31M exiting March, ~35M in June followed by ~39M and 43M in the
remaining two quarters of the year. Although a portion of this incremental
capacity will be attributable to yield/process improvements, the bulk is
directly a function of capital deployment, which is substantially being funded
by customer pre-payments. Management indicated that substrate and media
capacity will scale in tandem and that the required facilities are now in place
with equipment installation commencing in the next several weeks. That said,
our supply/demand analysis suggests that industry capacity will likely struggle
to keep up with demand over the coming 12 months, which has favorable
implications for both Komag and HDD industry-level pricing (in contrast to
recently voiced concerns). Even so, given risk of bumpiness surrounding
industry inventory management, seasonality, and the Seagate (STX: $24.86; 1H)
acquisition of Maxtor (MXO: $8.97; 2S) our Komag model adopts what we view as a
base-level assumption set with respect to capacity utilization. Our current
estimates assume 100% utilization in the existing quarter, dropping to 95%, 90%
and 89% in the ensuing three quarters for a blended 94% for the year. This
compares to management's target utilization rate of 90-100% per quarter and the
100% level the company has been operating at for the past year. Should we
employ 93% utilization ratably throughout the final nine months of the current
year, using a mid-point of the company's 13-20% net margin target our
sensitivity model suggests CY06 EPS of ~$4.80 versus our current $4.36 and
consensus of $4.23.

Citigroup Global Markets Inc. is an advisor to Maxtor Corp in its proposed
merger with Seagate Technology Inc.

* Ramp of 2.5" in CE Appears Imminent.

The company has been indicating since early to mid last year that it sees an
opportunity for aluminum based media to supplant glass in some 2.5" portable
environments. Historically (through today), portable applications have been
dominated by glass-based media given more attractive shock resistance
characteristics versus aluminum. That said, changing market conditions and
technology advances have opened the door for aluminum based media.
Specifically, the notebook market continues to come under pricing pressure
driven by increased competition and a shift toward "value" products. With
advancements in head/suspension technology and disk drive intelligence reducing
the significance of the shock resistance advantage of glass, coupled with
~$1.00 lower ASP's per unit versus glass, aluminum is being considered by at
least two HDD manufacturers (and their respective customers) as an alternative.
We suspect an additional incentive surrounding this consideration relates to a
risk-mitigation strategy associated with the transition to perpendicular in
glass-based notebook drives, discussed below. Further, several "quasi-
portable" products in the consumer electronics market have incorporated 2.5"
notebook drives, most notably X-Box and we suspect PlayStation3 in the gaming
segment. Although notebooks represent an attractive opportunity over the
longer-term, we believe this latter segment represents a attractive and likely
more proximate market for aluminum-based 2.5" drives. Management stopped just
short of confirming these suspicions yesterday as indicated that non-notebook
applications could yield several million aluminum-based units for the company
during the current year, translating to a few percent (~2-3%) of sales. This
compares to our existing estimate of ~600k 2.5" aluminum PC/CE units at <1% of
revenue.

* On Tack with a Measured Transition to Perpendicular Recording (PMR)

Komag anticipates that the sweet spot of its target market (3.5" desktop and
consumer), which represents ~93% of the company's unit volume, will not make
the shift to PMR technology until early 2007. The basis for this is the
ability to drive incremental areal density from aluminum based media via
etching, which should afford existing longitudinal recording technologies the
ability to scale to 200GB per platter (150GB per sq. inch) versus the 160GB
platters that are just now ramping in volume at a handful of manufacturers.
All products beyond the 200GB per platter density will likely be PMR-enabled.
Management believes, and we concur, that glass-based disk drives will be the
first to adopt PMR technology given glass cannot be etched and, as such, is
more quickly encroaching upon density limits under existing recording
technology (superparamagentic limit). Accordingly, the notebook and small form
factor markets are expected to be the first to see PMR, as already reflected in
early product introductions from Seagate, Hitachi and Toshiba. Komag does not
currently participate in the glass-based media segment and has no intentions to
do so. That said, we nonetheless believe that the company is working to
introduce PMR-ready media in its enterprise line (~7% of CY05 units) by mid-
year 2006. PC and consumer are expected to follow sometime in 1H CY07.
Although specifics around pricing were left from the discussion, management
indicated that the company does expect costs for PMR to initially be greater
than existing media, but at volume the margin profile is expected to be
comparable.
VALUATION

Our price target for Komag shares is $56. We employ both Price/Sales and
Price/Earnings as our valuation methodologies but reply upon our P/E output as
the primary price target determinant. The basis for this is what we view to be
the company's reduced sensitivity to revenue levels versus both its own history
and its peers due to lower deprecation costs as well as increased profitability
attributable to Malaysian-based manufacturing and internal substrate supply.
We view the majority of these advantages as sustainable. The company's direct
comparables include stand-alone disk drive manufacturers Seagate, Western
Digital and Maxtor as well as component provider Hutchinson Technology.
Although the company also competes against several international companies
including Showa Denko, Fuji Electric, Hoya and Asahi Glass, given each derives
the majority of their revenue from sources other than the HDD media market, we
do not view them to be relevant comparables from a valuation perspective.

Based on our estimates, Komag is currently trading at 1.9x CY06 sales and 11x
CY06 EPS. On a comparative basis, the company's mean, high and low forward
revenue multiples over the prior two years have been 1.1x, 1.7x and 0.7x,
respectively. Conversely, the shares forward earnings multiple range over this
same period have been 10x, 13x and 7x, respectively.

With respect to our Price/Earnings valuation, we are assigning a 13x multiple
to our CY06 EPS estimate, for a $56 (rounded) price target. In our view,
investments in the disk drive industry have historically been based upon short-
term horizons (12 months or less) due to the rapid manner in which industry
fundamentals can change. As such, our upside bias to earnings in 2006 and 2007
merits a target multiple at the high end of the range, or a premium thereto.
Accordingly, we are applying a multiple that is in-line with the shares two
year high of 13x. Had we opted to employ a Price/Sales valuation, we would
consider a 25% premium to the shares historical range given the company's
continued ability to deliver superior growth and profitability versus
historical levels. Applying a 2.0x multiple to our revenue forecast suggests a
target price of $54.

RISKS

We rate shares of Komag as High Risk. Our risk rating reflects our views
related to the stock's price volatility (Beta = 1.8 weekly since 12/2003 per
Bloomberg), earnings stability, and current balance sheet health ($2.95 net
cash/share). Although we acknowledge the company's prior Chapter 11 status
merits consideration, with the improved capital structure including lower
levels of debt at more attractive terms and the sale of spare facilities,
Komag's post-restructuring operating efficiency has minimized the chance for
recurrence.
Risks to the stock achieving our valuation target include the following:

* Incremental industry capacity coming on-line in calendar 2006. Throughout
calendar 2005 the dominant theme within the disk drive industry has been
tight supply amidst strong demand. Exiting the year, we expect aluminum-
based media/substrate remains tight, while glass-based media is short of
demand. In order to restore balance, many of the media and substrate
suppliers to the market, both captive and merchant, are expected to increase
capacity in the coming year. Our current expectations are that, absent
Komag, the bulk of this incremental capacity will be in glass-based media at
2.5" and below. Although considerable barriers are present related to
redeploying capacity, most notably the ability to procure substrate, should
the market more aggressively pursue aluminum versus glass, Komag's
utilization rates and margins could be negatively impacted. Similarly,
should this incremental capacity be met with lower than expected demand
levels, the company would likely fail to meet our estimates and price
objective.

* Introduction of perpendicular recording could reduce disk-per-drive ratio.
We expect the industry to begin to more broadly introduce disk drives
utilizing perpendicular magnetic recording (PMR) technology during the latter
half of calendar 2006. PMR holds the promise of re-accelerating the areal
density curve, or the amount of data that can be stored per square inch of
surface area, which is required for the disk drive industry to maintain a
trajectory that is consistent with Moore's Law. However, should this
expected improvement in recording density not be offset by an equal increase
in storage demand, disk drive unit volumes will likely face deceleration.
Such was the case during the 1997-2002 period, during which a sizable
industry capacity build-up amidst strong unit demand was met with the
introduction of a new recording technology (MR, or magneto-resistive),
resulting in broad under-utilization of capacity and significant operating
losses. Given their exposure to both disk drive unit volumes and the average
number of disks per drive, this scenario was disproportionately negative for
component suppliers, including Komag. We believe that the industry and Komag
are better positioned versus the 1997 example due to a lower desktop disk-
per-drive ratio entering the transition (1.7:1 vs. ~3:1), new storage-hungry
end-markets (consumer) and tighter supply. Reflecting this, our estimates
assume only a modest contraction in the disk-per-drive ratio beginning in
calendar 2007. Should our ratio assumptions prove to be too aggressive, the
company's ability to achieve our estimates and price objective will be
materially challenged.
* Customers are also competitors. In addition to procuring media and/or
substrate from Komag, several of the company's largest customers also have a
captive source of supply. Specifically, Maxtor/MMC and Seagate, which
together accounted for 54% of revenue in the September 2005 quarter,
manufacture a significant portion of their own media. Although each has
recently entered into multi-year volume purchase agreements (VPA's) with the
company, there is no guarantee and only limited recourse should said volumes
fail to materialize. If end-demand proves to be weaker than generally
expected, or the transition to perpendicular recording proves more disruptive
to unit demand or the disk-per-drive ratio, industry utilization rates will
be materially negatively impacted. Under this scenario, Komag's customers
who have captive media operations would likely source a greater percentage of
their media and/or substrate requirements internally. Related, Seagate
recently announced its intentions to acquire Maxtor. Our current assessment
is that this acquisition poses little near- to intermediate-term risk and
only modest long-term risk for Komag. However, history has demonstrated that
consolidation in the HDD industry comes in waves. Should this prove the
case, we view Western Digital as the most acquirable company remaining due to
the company's status as the last remaining stand-alone drive manufacturer of
scale, excluding the combined Seagate/Maxtor entity. If Western Digital were
to be acquired by a third party that has alternative media suppliers, our
estimates and price target would likely prove unachievable.

* Market acceptance of aluminum-based notebook drives is uncertain.
Historically, glass-based media has dominated the notebook disk drive market
(2.5" and below) due primarily to superior shock resistance characteristics
versus aluminum. However, given improvements in head and suspension
technology and disk drive intelligence, Komag's position is that aluminum-
based media is now an acceptable alternative in mobile compute environments.
We believe several of Komag's customers (disk drive manufacturers) are
currently developing aluminum-based notebook drives. However, there is no
assurance that notebook OEM's will either qualify or ship said products in
volume. Although we see little downside risk to our current estimates
associated with notebook penetration (<$3M in CY06), with the notebook market
continuing to gain share from desktop PC's, failure to penetrate this market
may result in a declining addressable market for Komag. Conversely, given
the significant volume opportunity associated with modest penetration of the
notebook segment, should this endeavor prove more successful than our current
assumptions, our estimates could prove to be materially conservative.

INVESTMENT THESIS

We rate Komag shares as Buy/High Risk with a $56.00 target price. Although the
shares appreciated over 80% between January 3 and December 30 2005, leaving the
bulk of the returns arguably behind investors, we see room for continued upside
driven by simultaneous multiple and estimate expansion. In the context of
expectations for continued strength in end-demand for disk drives in 2006, our
above-consensus estimates are based on our views related to the company's
leadership in key aluminum substrate manufacturing, incremental unit volumes
associated with recently signed purchase agreements, and the potential for an
increased addressable market (notebook).
SUMMARY
* Inclusive of updated capacity targets,
our supply / demand model suggests tight
substrate/media availability will persist
through the year.
* PMR transition will be slow and steady.
Mgmt expects to push 3.5" (93% of units)
through at least one more spin
(200GB/platter) prior to adopting PMR in
1H07. Enterprise (~7% of units) on track
for mid-year 2006.
* Opportunity in 2.5" is near, with game
consoles appearing most proximate. Mgmt
expects MM's of 2.5" AlMag units in CY06
(2-3% of sales) vs. our current 600k and
<1% fcst.
* Maintaining Buy rating and $56 price
target. The solid returns over the past
month will likely see near-term
consolidation due to seasonal concerns and
the lack of news flow prior to March
earnings. With the fundamental story
intact and compelling potential for upside
vs. our above-consensus CY06 estimates,
our mid-to-longer-term view is to
accumulate during this period.


Link list for this report:

http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=1602527417&tid=stx&s id=1602527417&mid=31383

http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=1602527417&tid=stx&s id=1602527417&mid=31384

http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=1602527417&tid=stx&s id=1602527417&mid=31385

http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=1602527417&tid=stx&s id=1602527417&mid=31386

http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=1602527417&tid=stx&s id=1602527417&mid=31387

http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=1602527417&tid=stx&sid=1602527417&mid=31388

update:
KOMG: Merrill Lynch Sets @ Neutral; Analyst Notes
Thursday , March 23, 2006 08:31 ET
Issuer: Komag Inc (NasdaqNM: KOMG)
Analyst Firm:  Merrill Lynch & Co.
Current Rating: Neutral
Analyst Comments: The firm is resuming their coverage on the stock.

bounced back from 50EMA

KOMG: Short Interest DN 4.5% to 5.8M in Mar 2006
Friday , March 24, 2006 16:19 ET

According to new short interest data from NASDAQ, short interest for Komag Inc (NasdaqNM: KOMG) DECREASED 4.5% to 5,774,184 shares for the month ended mid-March, 2006.

SYMBOL      FEBRUARY           MARCH        CHANGE       %CHANGE     DAYS/COVER
--------   -------------   -------------   -------------  ------------  ----------
KOMG           6,046,773       5,774,184        -272,589        -4.51%           5

Based on KOMG's 20-day average daily share volume of 1,263,760, it would require approximately 5 day(s) of buying to cover this short interest.

Komag's disks drive rising profits
By Rex Crum, MarketWatch
Last Update: 6:32 PM ET Apr 3, 2006

SAN FRANCISCO (MarketWatch) - In the market for computer hard disk drives, production capacity is king. And these days, no disk-drive maker can match the capacity of Komag Inc.
Komag (KOMG :
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KOMG46.24, -1.36, -2.9% ) churned out almost 30 million disks in the fourth quarter, when its factories were operating at near-100% capacity. The firm is expected to top that total when it reports first-quarter results on April 26.
The San Jose, Calif.-based company is the top maker of aluminum disks used in the hard drives of Seagate Technology Inc., Western Digital Corp. and other market leaders.
Surging demand for digital storage, combined with tight supplies of the disks, has been a boon for the firm's business.
"We are in a real sweet spot right now," said Komag Chief Executive T.H. Tan, who is retiring near the end of the year.
In 2005, its full-year profits more than doubled to $115.6 million, or $3.55 a share. Sales rose 50% to $685.9 million.
Investors have found the ride just as sweet, as Komag shares doubled between October and early March. During the first quarter of the year, Komag shares climbed almost 39%.
"They've enjoyed tremendous interest in the last 18 months due to the tightness in supply of these disks," said Krishna Chander, a storage industry analyst with iSuppli, a technology research firm.

news update:
Hitachi and Komag Expand Strategic Supply Relationship for Hard Disk Drive Growth
Wednesday April 5, 4:00 pm ET
Increased Purchasing Capacity to Give Hitachi Greater Flexibility for 3.5-Inch Hard Drive Growth

SAN JOSE, Calif., April 5 /PRNewswire-FirstCall/ -- Hitachi Global Storage Technologies (Hitachi) and Komag, Incorporated (Nasdaq: KOMG - News) today announced an expanded strategic supply agreement for 3.5-inch disk media.

(Logo: http://www.newscom.com/cgi-bin/prnh/19990816/KOMGLOGO )

This agreement will allow Hitachi to increase its 3.5-inch disk drive production under a Hitachi five-year growth plan. The new agreement is based on the companies' existing relationship for disk media supply.

"Komag is a key media supplier to Hitachi, and we are pleased to be able to expand our long-standing relationship," said Bob Holleran, COO, Hitachi Global Storage Technologies. "The relationship we have with suppliers, like Komag, is an important element of Hitachi's broader 3.5-inch growth plan, and we value the reliability and quality they bring to our products."

"As one of the world's largest hard drive manufacturers, Hitachi is a key customer of Komag and we are very happy to be working with Hitachi to expand our capacity to support their media requirements," said T.H. Tan, CEO of Komag. "We plan on adding some incremental capacity to support Hitachi that is principally geared towards 2007 and beyond."

Through their collaboration, Hitachi and Komag are committed to meeting and growing worldwide demand for hard disk drives -- both for IT and consumer electronic applications.