KOMG

[la-onda]

comments are appreciated 

Komag Slumps; Analyst Sees Difficult '06
Wednesday December 21, 9:10 am ET 
Komag Shares Slump in Premarket Trading As Analyst Sees Difficulty Beating 2006 Estimates

NEW YORK (AP) -- Shares of Komag Inc. slumped in premarket trading Wednesday after an analyst said there is little room for the company to continue to beat Wall Street expectations.
"In our view, the stocks meteoric rise this past year has left little room for any level of disappointment, and to this point, we believe Komag's recent trend of delivering operating upside could encounter some headwinds moving through 2006," wrote JPMorgan analyst Mark Moskowitz in an investor note initiating coverage of the stock at "Neutral."

The analyst said he expects the San Jose, Calif. maker of disks that are incorporated into computer disk drives "to maintain industry-leading margins over time" but said "seasonal patterns and longer-term risks of excess capacity could limit the stock's outperformance potential.

Moskowitz thinks Komag will continue to benefit from the economics of disk media manufacturing -- prices of hard disk drives have fallen on average 15 percent per year, while disk media prices have only dropped in the low to mid single-digits in recent years, according to Moskowitz -- still, he argued that all the upside is already priced in the stock. Year to date, shares of Komag are up 84.2 percent.

In premarket trading, shares dropped 6.7 percent, or $2.30, from Tuesday's close of $34.60.

[owen654321]

Well, KOMG was my stock-picking contest pick for last month and I still follow it, even though I sold shortly before the end of the contest... it was due for a rest after all it's hard work climbing that hill.

With that said, I re-entered today at $32.77.  There is excellent news today of mergers/buyouts with the biggie hard drive makers.  Less price competition can't be bad, and like the press release said, I think there is doubt that things can "really be that good" looking forward with Komag.  So, the negative sentiment is there again.  Plus, a lot of weaker hands have been shaken out, hopefully, with this lull after the run-up.

Plan: If we hit $34 today I'll take quick profits.  If we close below $32, I'll take a loss and look to re-enter sometime later.  Otherwise I'm pretty comfortable holding at this level. 

[Michael]

Shares of Komag Inc. slumped in premarket trading Wednesday after an analyst said there is little room for the company to continue to beat Wall Street expectations.
"In our view, the stocks meteoric rise this past year has left little room for any level of disappointment, and to this point, we believe Komag's recent trend of delivering operating upside could encounter some headwinds moving through 2006," wrote JPMorgan analyst Mark Moskowitz in an investor note initiating coverage of the stock at "Neutral."

Well you asked for comments so here you are:

I will print a copy of this so-called analyst opinion and put it in my yellow file for all times most stupid analyst opinions! He will have the honor of being in the top 10 (after a few analysts who downgraded STX at the bottom getting the whole HDD industry wrong!

First of all the analysts estimates expects a PE of 9 next year. Why in hell do you need to beat that? The stock is already deeply discounted especially having in mind the growth.

But here is the good news we know with almost certainty that they will beat the analysts estimates in this quarter. The estimate is 99 cents compared to 97 cents last quarter. With the strong pricing on media and the capacity increase that will kick in already this quarter it would be a miracle if they don't beat that.

It seems like Mr. Moskowitz is at the opinion that the stock has increased a lot and have to come a bit down. Well I think he is bloody wrong 

I don't know if I should hate or love these self-proclaimed experts. They certainly create a lot of buying opportunities but they can be a bit of an annoyance if you hold the stock!

Mike

[la-onda]

SNDK/KOMG: Sandisk May Make Run at Komag; Unconfirmed
Thursday , December 22, 2005 09:59 ET
Hearing, unconfirmed, that Sandisk Corporation (SNDK) could make a run at Komag Inc. (KOMG) based on Seagate Technology (STX) and Maxtor (MXO) deal. SNDK shares are currently trading higher by more than 1%, while shares of KOMG are trading relatively flat.
link: http://www.knobias.com/individual/public/news.htm?eid=3.1.77dd6925ea7d69d75d5ab628c710935a8de7e5f1fcd30a28a0bd0dc3a4749b14

&

KOMG: Komag Inc; WHY?
Totally different manufacturing technology, product, everything. SNDK's business is to steal market share from KOMG type storage media. SNDK makes semi chips of small geometries. KOMG makes 3.5" aluminum based platters where the magnetic media is spurted onto the Al. Its material science, where SNDK is sort of material science but more electrical engineering. Komag, Incorporated designs, manufactures and markets thin-film media, or disks, that are incorporated into disk drives, the primary storage devices for digital data. The Company claims to be the world's largest independent manufacturer of thin-film media. Disk drives incorporating thin-film disks are used wherever large amounts of data are stored, including applications such as the Internet, enterprise databases, communications systems, personal computers and consumer appliances such as peer-to-peer servers, digital video recorders, and game boxes.

link:
http://www.knobias.com/individual/public/news.htm?eid=3.1.8dbdb77cafdc632d3bf06dac7aa68c65dfc92cffdfc5174768f2107b9a284802

[la-onda]

from yahoo board:

Flash verses HDD Future
link:
http://www.needhamco.com/Research/Documents/20051012_HAND_vs_Hard_Disk_Drives__-__Hype__Myth_and_Reality.pdf

[la-onda]

KOMG: Short Interest DN 12.8% to 8.5M in Dec 2005
Wednesday, December 28, 2005 06:00 ET

According to new short interest data from NASDAQ, short interest for Komag Inc (NasdaqNM: KOMG) DECREASED 12.8% to 8,478,786 shares for the month ended mid-December, 2005.

SYMBOL    NOVEMBER        DECEMBER          CHANGE       %CHANGE      DAYS/COVER
--------   -------------   -------------   -------------  ------------  ----------
KOMG           9,728,017       8,478,786      -1,249,231       -12.84%           8

Based on KOMG's 20-day average daily share volume of 1,138,140, it would require approximately 8 day(s) of buying to cover this short interest.

[la-onda]

back to reality in 2006 

KOMG: Smith Barney Starts @ Buy; Sets Tgt @ $43; Analyst Notes
Tuesday , January 03, 2006 08:07 ET
Issuer: Komag Inc (NasdaqNM: KOMG)
Analyst Firm:  Salomon Smith Barney
Ratings Action: INITIATE
Current Rating: Buy
Target Price Action: INITIATE
Target Price: $43.00
Analyst Comments: The firm is positive on HDD demand, ramping volumes with major customers, and the entry into the high growth notebook market.

cheers
Oliver

[la-onda]

on FIRE 

Komag Raises 4Q Revenue Outlook
Tuesday January 10, 6:18 pm ET 
Komag Raises Fourth-Quarter Revenue Outlook; Shares Jump Aftermarket


NEW YORK (AP) -- Komag Inc., a maker of data storage devices, raised its fourth-quarter revenue guidance Tuesday, thanks to strong demand and the company's ability to produce and install products ahead of schedule.
The San Jose, Calif., company said in a filing with the Securities and Exchange Commission it now expects the quarter's revenue to rise by 6 percent to 7 percent from the prior quarter's $180 million, compared with its previous outlook of a 2 percent to 4 percent revenue jump.
Analysts, on average, are expecting revenue of $186.1 million, a 3.4 percent increase from the third quarter, according to a poll by Thomson Financial.
Shares jumped $1.99, or 5 percent, to $41.23 in aftermarket activity, after closing up 34 cents, at $39.24 on the Nasdaq. The stock has traded between $17.20 and $40.50 in the past 52 weeks.
&
Komag, Incorporated (the "Company") previously announced it will be presenting at the following investor conference:

The 8th Annual Needham & Company Growth conference
Thursday, January 12, 2006 at 6:00 a.m. PST (9:00 a.m. EST)
In New York, New York

A live and archived webcast of the presentation will be available under Webcasts and Events in the Investors Section of Komag's website at http://www.komag.com.

At the investment conference, the Company's executives expect to provide updates regarding conditions in the hard disk industry. Specifically, the Company expects to make the following comments:

*The Company currently expects revenue for the fourth quarter of 2005 to be
6% to 7% higher than the prior quarter. The Company's prior guidance for
revenue in the fourth quarter was a 2% to 4% increase over third quarter of
2005 revenue of $180 million.

*The expected increase in the revenue was due to strong demand throughout the
quarter and the Company's ability to install, qualify and produce product on
new equipment ahead of the prior schedule.

*The Company expects net margin for the fourth quarter to approximate 17% to
18%, consistent with prior guidance.

*With all of the equipment for the first capacity expansion now
installed, the Company expects available media production capacity for the
first quarter of 2006 to approximate 31 million disks.

*Current customer demand for Komag disks appears strong, which together with
the increased capacity could lead to increased revenue in the first quarter
of 2006, over the fourth quarter of 2005.

[la-onda]

new updated 31 slides presentation:
http://www.komag.com/investors/presentations/KOMG3Q05_Jan06.pdf

please check slide 20 !!!



here we go!

[la-onda]

two upgrades today 

Komag    KOMG    Needham & Co    Strong Buy    $44 » $48
&
Komag    KOMG    Piper Jaffray    Outperform    $40 » $50

http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/UpgradesDowngrades.htm

[la-onda]

3rd upgrade

KOMG: Craig-Hallum Ups to Accumulate from Neutral; Sets Tgt @ $48; Analyst Notes
Wednesday, January 11, 2006 10:48 ET
Issuer: Komag Inc (NasdaqNM: KOMG)
Analyst Firm:  Craig-Hallum Capital Group LLC
Ratings Action: UPGRADE
Current Rating: Accumulate (from Neutral)
Target Price: $48.00
Analyst Comments: The firm is upgrading KOMG based on positive Q4 revenue guidance.

[Michael]

Hi Oliver

Indeed lots of good news around Komag these days. As said before you didn't have to use more than a couple of minutes to study HDD market and Komag's releases to know that this upgrade was in the making.

Now we are just missing JP Morgan officially apologize for the disastrous rating on December 21. I just can't imagine that the so-called analyst Mark Moskowitz actually believed that Komag might miss the estimates for this quarter!

I previously put a $90 target on Komag so there is still a long way to go. I really can't understand why a stock that has grown earnings with 300% and continue to guide upwards should trade at a forward PE below 12!

Mike

[logocovet]

Great call on KOMG Michael.

I got in on your rec.  I wish I got in on STX too.  Suddenly all the analysts and press are jumping on how good STX is.  Is it too late to get into Seagate?

Thanks.

[valueseeker]

Hi Michael

Thanks again for getting us into KOMG. I have a target price of $4 EPS x 15 PE = $60. How did you arrive at $90?


-Louis

[Michael]

Hi Louis,

I think your EPS forecast is pretty realistic. They will add a lot of capacity next year as you know but on the other side they will start to pay taxes.

It really comes down to the fair PE. KOMG is a great story with phenomenal top and bottom line growth. Their market position is extremely strong (they can't produce enough media to meet demand!). Should they trade at a PE of 15?

Maybe you are right but try to look at the industry. The average PE is around 20 with an average revenue growth of 19%. Komag's revenue growth (ttm) is 76%.

My target equals a PE of 22. Is that too much?

At this point in time it is probably an academic discussion. I think most 3SOF members would be happy with a 50% gain 

Logocovet I will try to answer your STX question in the Seagate thread.

Mike