3SOF

Quote from: Melf Elf on June 16, 2006, 10:41:16 AM
Bought KOMG at 42.32.  Stop: 41.08, below this week's low.  Risk: a loss of 2.9%

Stopped out at 41.08 on the opening tank.  Loss: 2.9%.

Quote from: Melf Elf on June 23, 2006, 09:45:10 AM
Stopped out at 41.08 on the opening tank.  Loss: 2.9%.

That was a dirty trick last Friday morning, busting my stop by eight cents on the early swoosh down to 41.00, then closing it out at 42.00.

Curses! 

After repeated failures, yesterday, KOMG finally closed decisively above its 50 DMA, and also closed above the neckline (blue) of its early 2006 H&S Top.

Quote from: nutsterrt on June 16, 2006, 02:25:39 PM
I've been watching this discussion from the shadows and have joined Melf on the long; purchased this AM, in at 42.25.

nutsterrt,

I hope you're still long. 

Hanging in there, my friend  I was willing to go down to 40 even. Glad I never hit it 

Quote from: nutsterrt on June 30, 2006, 09:42:43 AM
Hanging in there, my friend  I was willing to go down to 40 even. Glad I never hit it 

nutsterrt,

Very good!  I'm glad that you're still in.  Applause. 

Makes me feel better about getting shaken out it, after studying this chart for so long.  I should have "paid up," and gotten back in, but I was too irritated by that goofy swoosh to 41.00 at the open on June 23 that knocked me out of my long postition. 

It's a dirty trick to get punished for "Honoring Thy Stop" on a little fakeout. I HATE THAT.

   

Enough of my whining (We need a Cry Baby face on the toolbar...oh, wait, there it is!)

   

At any rate, I'm real happy for you, buddy!     

Good luck!  Hope you make lots of $$$

fyi:

Quote from: la-onda on July 27, 2006, 04:23:27 AM
Bear, Stearns & Co. Inc. Andrew Neff on KOMG
Komag, Inc. (KOMG-$41.57-Outperform)
Another Strong Quarter And Outlook Reflecting Healthy Trends; Unfounded Weakness Presents Buying Opportunity; Raising Ests
• ANOTHER STRONG UPSIDE. Reflecting a continued strong demand backdrop, capacity additions and new program ramps (mobile), Komag delivered its 8th consecutive upside. We're raising our Street-high ests and would use the stock's weakness as a buying opportunity.
• DEBUNKING STOCK'S WEAKNESS. We believe the stock was weak aftermarket on 3 main issues: 1) inventories, 2) ASP trends, and 3) margin guidance.
• 1) While inventories rose by 4% seq (on 12% rev growth), days inventory declined to 41 from 44 days, and concerns are overdone given the need to increase raw materials due to shortages, longer lead times and strong demand.
• 2) ASP was flat seq and slightly below ests given lower enterprise units (despite increase in high-cap drives), however ASP has shown remarkable stability and we expect it to remain roughly flattish over time given support from P.
• 3) While GM was weaker due to some inefficiencies as new equipment came online & programs ramped, and net margin guidance of 16-17% was more cautious, Komag has been conservative historically and some issues impacting margin should unwind in '07 (no expense from accelerated vesting).
• SOLID 2Q. KOMG reported 2Q06 EPS of $1.21, above our $1.17 est. (Street at $1.14), driven by stronger revs of $233.6mm (above guidance for $219-$229mm). ASP of $5.74 was lower than expected given less enterprise mix, while GM of 27.8% was below our 28.2% est.
• RAISING ESTS. We're raising post-option EPS for `06 from $4.85 to $4.90 and for `07 from $5.30 to $5.35. For 3Q06, we're lowering EPS from $1.25 to $1.24 on revs of $246mm (up 5% seq), at high end of guidance for 5% seq rev growth and EPS of $1.17-$1.24.
• MAINTAINING TARGET. We're maintaining our CY06 target of $65 using a 12x PIE on post-option `07 EPS. While investor tone on the call was fairly negative given aforementioned issues, we believe the concerns are overblown and growth opportunities remain (mobile, PMR, increases at WDC/Hitachi).
Another Strong Quarter And Outlook Reflecting Healthy Trends; Unfounded Weakness Presents Buying Opportunity. Reflecting a continued strong media demand environment, capacity additions, and new program ramps (2.5-inch/mobile), Komag delivered its 8th consecutive revenue/EPS upside. Despite the strong result and more favorable guidance relative to Street consensus (leading us to raise our Street-high estimates again), we believe the stock was weak in aftermarket trading owing to three potential issues: 1) further inventory increases (albeit slight), 2) ASP trends, and 3) margin guidance.
• Inventories: While continued growth of inventories by 4% sequentially (after 32% growth last quarter) may have been a point of contention, days inventory declined to 41 days from 44 days in the March quarter given 12% sequential revenue growth. Further, we believe that concerns on inventory growth are overdone given Komag's need to increase its raw material supply due to shortages, longer lead times, and the anticipation of continued strong customer demand in second-half 2006.
• ASP trends: ASP was flat sequentially and slightly below expectations, despite a large increase in higher-capacity drives at 120GB+, given a lower mix of enterprise units as Seagate ramps down Maxtor's acquired server business. However ASP has historically shown remarkable stability (which we expect to continue), and we expect it to remain roughly flattish over time given support from the ramp of higher-ASP perpendicular recording drives in 2007.
• Margin performance and outlook: Gross margin was weaker due to some unexpected factory inefficiencies as new equipment came online, new programs ramped and Komag saw some extra cost on the cross-qualification of products from the Seagate/Maxtor combination. While net margin guidance of 16%-17% for 3Q06 was viewed as more cautious, Komag has been conservative historically and some of the issues impacting margin should unwind in 2007, as Komag should begin to recoup factory efficiencies as new equipment is stalled and programs become ramped, and it no longer is faced with roughly $2 million per quarter in expenses related to accelerated stock options vesting.
Despite some investor anxiety on the HDD industry, Komag continues to benefit from a supply constrained environment (which is expected to continue into 2007) and remains a strong capacity expansion story. Further, we're encouraged about growth drivers from new ventures, including 2.5" aluminum-based notebooks (Komag already shipped a meaningful number to its first customer in 2Q06 and expects incremental volumes from a second customer by the end of 3Q06) as well as PMR for enterprise (volumes later in 2006). Moreover, Komag appears proactive in addressing the Seagate/Maxtor integration risk by offsetting with higher volumes to Western Digital and Hitachi.
• Collateral Impact: While Western Digital increased as a percentage of Komag's sales to 38% (from 35% in 1 Q06), implying some desktop share gain, Hitachi grew from 21% to 26% of sales, which suggests that it may have been the biggest beneficiary of the Seagate/Maxtor integration.
2Q06 EPS/Revenues Tops Expectations. Komag reported 2Q06 post-options EPS of $1.21 (vs. $0.86 a year ago), excluding a $21,000 gain from an asset disposal (which was immaterial to EPS) but including $1 million (or $0.03 per share) from options expense and $2.1 million from accelerated vesting expenses, which exceeded our $1.17 estimate, First Call of $1.14, and Komag's guidance of $1.14-$1.19 (reflecting a net margin of about 17%). Stronger-than-expected EPS was driven by revenue upside as well as lower-than-expected tax rate (added about $0.01), partially offset by lower gross margin.
• Revenues Above Guidance/Expectations. Revenues of $233.6 million (up 12% sequentially and 35% year/year) exceeded our estimate of $228.6 million, First Call consensus of $223.3 million and above Komag's guidance of a 5%-10% sequential increase (or about $219-$229 million).
• Upside In Finished Disk Revenues On Higher Units, Offset By Lower ASP Due To Mix. Finished disk revenues of $210.0 million were up 38% year/year and 15% sequentially and were ahead of our estimate of $201.9 million owing to better-than-expected shipments, somewhat offset by lower ASP. Finished disk units of 36.6 million were above our 34.9 million estimate, with capacity utilization again at 100%+.
• ASP Below Expectation On Mix Shift. Despite the increase in mix of 120+ GB/platter shipments, increased to 44% (or 16 million) from 24% of shipments (or 7.7 million units) during the prior quarter, ASP was about flat at $5.74, which was below our $5.78 estimate. Lower-than-expected ASP was due to decline
in much higher-ASP disks for enterprise drives owing to STX/MXO merger, which declined from 7% of shipments (or 2.2 million units) to 5% (or 1.7 million) sequentially, somewhat offset by increased shipments of higher capacity platters.
• Other Disk Revenue: Other disk revenues of $23.6 million were below our $26.8 million estimate and comprised 10% of sales.
• WDC/Hitachi Up, Seagate Down Sequentially. Owing to the completion of STX/MXO merger and the subsequent rationalization of MXO product line, shares of combined STX/MXO declined by 9% sequentially (or 19% year/year) from 39% of total revenues to 32%, or $74 million in revenues (or about 13 million units). KOMG noted that it expects STX/MXO share to increase sequentially in 3Q06 with MXO product rationalization behind it combined with STX/MXO volume commitments. On the other hand, sales to Western Digital rose 21% (or 169% year/year) sequentially to $88 million on estimated 13 million units, or 38% of sales, up from 35% during the prior quarter. In addition, Komag saw sales increasing to Hitachi by 37% sequentially (or 38% year/year) to $60 million (or estimated 8.5 million units).
• Lower Gross Margin On Lower Efficiencies. Despite full capacity utilization, gross margin of 27.8% was 39 basis points below our estimate of 28.2% and declined by 53 basis points sequentially (but about flat year/year) owing to some unexpected factory inefficiencies as new equipment came online, new programs ramped and Komag saw some extra cost on the cross-qualification of products from the STX/MXO combination..
• In-Line Operating Expenses. Total operating expenses of $25.2 million (including $1 million in stock-based compensation and $2.1 million in accelerated vesting of stock options and restricted stock related to previously announced CEO transition) were about in line with our estimate of $25.5 million. The company expects stock¬compensation-related expenses to remain at the current level of about $1 million and about $2 million associated with accelerated vesting of options (or $3.0 million in aggregate).
• Lower Tax Rate From Tax Holiday. Tax rate of 2.3% was below our 3.0% estimate, which added about $0.01 to EPS. The company reiterated its outlook for 2006 tax rate of 3.0% owing to the tax holidays in Malaysia, which do not expire until 2016.
• Balance Sheet Remains Strong, Days Inventory Improved. Total cash of $190 million was about flat sequentially, translating to cash per share of about $6.24 (net cash per share of $3.60 excluding convertible debt). While total inventory of $75 million grew about $3 million sequentially (or 4%), days inventory declined from 44 days to 41 days sequentially. Moreover, finished goods inventory of $7 million was up about $1 million sequentially and is about 1 week of sales. Majority of the inventory was raw materials, which increased by about $2 million, given the need to mitigate materials shortage concerns and to support production levels to meet continuing strong customer demand. DSO of 50 days decreased from last quarter's 52 days owing to higher revenues and the timing of customer payments.
Raising 2006 Estimates. Reflecting 2Q06 upside, coupled with continued media supply constraints and potential for growth from new applications (e.g., mobile), we are raising our estimates for 2006 and 2007. We are increasing our pro forma post-options EPS estimate for 2006 from $4.85 to $4.90 (which includes the impact of stock-based compensation expense of $3.7 million). Following assumptions were used to arrive at our EPS estimate:
• Revenues of $957 million, up 39% year/year but lowered from our previous estimate of $962 million due to
assumption of lower ASP from mix shift and lower revenues from substrates
• Finished disk units of 150 million, up 41% year/year and raised from our prior 148 million assumption
• ASP assumption of $5.71, lowered from our prior assumption of $5.75 due to mix shift
• Gross margin of 27.8%, lowered from 28.0% due to lower 2Q06
• Tax rate of 2.8%, lowered from our prior assumption of 2.9%
Lowering 3Q06 (September) Estimates. For 3Q06 (September), we are lowering our post-options EPS estimate from $1.25 to $1.24 (vs. $0.96 a year ago) on revenues of $246 million (up 37% year/year and 5% sequentially) on 39 million units (up 42% year/year and increased from our prior 38.8 million assumption), ASP of $5.70 (lowered from our prior $5.76 assumption) and gross margin of 27.6% (compared to our prior 27.9% assumption). Komag is forecasting revenues to grow 5% sequentially from the June quarter's $234 million (or about $245 million) and achieve a net margin about 16%-17%, implying an EPS range of about $1.17-$1.24 (including options expense).
Raising 2007 Estimates. For 2007, we are raising our post-options EPS from $5.30 to $5.35 (including the impact of stock-based compensation expense of $0.12) primarily on lower tax rate assumption. We assumed:
• Revenues of $1.08 billion, up 13% year/year and lowered from our previous estimate of $1.10 billion
• Finished disk units of 173 million, up 15% year/year and raised from our prior 169 million assumption
• ASP assumption of $5.67, lowered from our prior assumption of $5.77
• Gross margin of 27.4%, from 27.7%
• Tax rate of 3.0%, lowered from our prior 4.0% estimate
Valuation: Maintaining 2006 Year-end Price Target of $65. We are maintaining our 2006 price target from $62 to $65 by applying a 12x P/E multiple (slightly lowered from prior 12.3x target multiple to reflect the concerns about declining margins) on our post-option 2007 EPS. While investor tone on the call was fairly negative given concerns about increases in inventory, declining ASP, and lower margins, we believe Komag can navigate through these risks and growth opportunities remain (mobile, perpendicular recording, more volumes at Western Digital/Hitachi).
Raising 2006 Estimates. Reflecting 2Q06 upside, coupled with continued media supply constraints and potential for growth from new applications (e.g., mobile), we are raising our estimates for 2006 and 2007. We are increasing our pro forma post-options EPS estimate for 2006 from $4.85 to $4.90 (which includes the impact of stock-based compensation expense of $3.7 million). Following assumptions were used to arrive at our EPS estimate:
• Revenues of $957 million, up 39% year/year but lowered from our previous estimate of $962 million due to
assumption of lower ASP from mix shift and lower revenues from substrates
• Finished disk units of 150 million, up 41% year/year and raised from our prior 148 million assumption
• ASP assumption of $5.71, lowered from our prior assumption of $5.75 due to mix shift
• Gross margin of 27.8%, lowered from 28.0% due to lower 2Q06
• Tax rate of 2.8%, lowered from our prior assumption of 2.9%
Lowering 3Q06 (September) Estimates. For 3Q06 (September), we are lowering our post-options EPS estimate from $1.25 to $1.24 (vs. $0.96 a year ago) on revenues of $246 million (up 37% year/year and 5% sequentially) on 39 million units (up 42% year/year and increased from our prior 38.8 million assumption), ASP of $5.70 (lowered from our prior $5.76 assumption) and gross margin of 27.6% (compared to our prior 27.9% assumption). Komag is forecasting revenues to grow 5% sequentially from the June quarter's $234 million (or about $245 million) and achieve a net margin about 16%-17%, implying an EPS range of about $1.17-$1.24 (including options expense).
Raising 2007 Estimates. For 2007, we are raising our post-options EPS from $5.30 to $5.35 (including the impact of stock-based compensation expense of $0.12) primarily on lower tax rate assumption. We assumed:
• Revenues of $1.08 billion, up 13% year/year and lowered from our previous estimate of $1.10 billion
• Finished disk units of 173 million, up 15% year/year and raised from our prior 169 million assumption
• ASP assumption of $5.67, lowered from our prior assumption of $5.77
• Gross margin of 27.4%, from 27.7%
• Tax rate of 3.0%, lowered from our prior 4.0% estimate
Valuation: Maintaining 2006 Year-end Price Target of $65. We are maintaining our 2006 price target from $62 to $65 by applying a 12x P/E multiple (slightly lowered from prior 12.3x target multiple to reflect the concerns about declining margins) on our post-option 2007 EPS. While investor tone on the call was fairly negative given concerns about increases in inventory, declining ASP, and lower margins, we believe Komag can navigate through these risks and growth opportunities remain (mobile, perpendicular recording, more volumes at Western Digital/Hitachi).

I give a shit on the AMTECH Report, this is a more realistic analysis (from STX Yahoo board)
cheers
Oliver

Quote
Valuation: Maintaining 2006 Year-end Price Target of $65. We are maintaining our 2006 price target from $62 to $65 by applying a 12x P/E multiple.

this is a more realistic analysis (from STX Yahoo board)

Oliver,

That was quite a thorough analysis!  Based on the chart, though, that $62-$65 target is going to be difficult.

On the break of the H&S Top in April, Target: 34.02 was IN PLAY.  That went ON HOLD when KOMG recently regained the neckline, but that rally ended in a Bear Flag Bull Trap at 47.84, six cents above the Right Shoulder of the H&S Top, thus the Bull Trap.

The H&S Top target of 34.02 is back IN PLAY, as is the Bear Flag target (can't measure it on this chart).

That isn't to say that the Bear Sterns analysis wasn't good, or even that it won't be right, but it doesn't look like it will be as the chart stands, at new lows for the year.  The market is a discounting mechanism (rule of thumb is six months out), and there could be things that the analyst can't possibly know right now.

KOMG attempted a rally early this morning, but got stopped at first resistance, 39.16.  That was the June low at the 200 DMA.  The rally fizzled at 39.50, just above that resistance, and KOMG tanked $3, taking out yesterday's low.


The stock currently has recovered $1 back to UNCH, but rallies should be difficult after the recent breaks of technical support levels.

34.02 is IN PLAY from the April 21 break of the H&S Top.
34.53 is IN PLAY from the July 14 break of the Bear Flag.

Unless we see something bullish, KOMG is on track for 34.02 - 34.53

BUSINESS SUMMARY   
Komag, Incorporated engages in the design, manufacture, and marketing of thin-film media (disks) for incorporation into hard disk drives. These drives are used to record, store, retrieve, and protect digital information in personal computers, high-end server (enterprise) storage systems, communications infrastructure, and consumer electronics appliances. It also offers single-sided disks, aluminum substrate disks, plated disks, textured disks, and polished disks. The company's products offer a range of coercivities, glide height capabilities, and other parameters to meet specific customer requirements. Komag sells its products to original equipment manufacturers in the disk drive market worldwide. Komag was founded in 1983 and is headquartered in San Jose, California.

Im going to try this one tomorrow! Good pick like usual you aiming for a cover target in the mid to high 20s?

Null,

Top Head & shoulders in the making,  looks like KOMG needs to go down more to connect the neckline.. IMHO

More bearish chart for KOMG

shorted some KOMG today  .

I have bear claws again.    I'll take a short KOMG spin.

Quote from: Melf Elf on July 28, 2006, 11:02:06 AM
34.02 is IN PLAY from the April 21 break of the H&S Top.
34.53 is IN PLAY from the July 14 break of the Bear Flag.

Unless we see something bullish, KOMG is on track for 34.02 - 34.53

Target Zone 34.02 - 34.53 from the April and July pattern breaks MADE at the open.  Low was 34.26, right in the middle of the zone.

Quote from: Melf Elf on August 25, 2006, 02:48:57 PM
Target Zone 34.02 - 34.53 from the April and July pattern breaks MADE at the open.  Low was 34.26, right in the middle of the zone.

The low in KOMG so far is 34.17.

When targets get MADE, that doesn't necessarily mean that a stock isn't going any lower (or any higher, if it's a bullish target), but it's an area where a stock might get a least a bounce in the other direction, and it's a good idea to look for signs of that.

Since the July 27 earnings smash below 2006 support, at 39.16, KOMG has been trading in a Bullish Falling Wedge (pattern in green).  On August 21, the top of the pattern came in at 37.75.  The high that day was 37.7699, so that third hit gave us a trendline validation, suggesting that it might have some signifiicance if broken on the upside.

Yesterday, KOMG closed just a hair above the top of the Bullish Falling Wedge.  It wasn't a convincing breakout by any means, but it's a technical breakout nonetheless, and at least a caution for the shorts, to be on alert.   

The slope is -0.22444, so it comes in today at 35.731.