AI
Sunday, October 17, 2004 2:03:53 PM
here's hoping ...
why not? If you're an investor with something more than teeny-tiny time horizon, you should be hoping there IS a short attack on SNDK. Unless you are talking about a short attack on a company without longer term positive prospects, short attacks ALWAYS wind up pushing the stock below equilibrium for a short period of time. It's the nature of the biz. An investor can hope for nothing more than a temporarily artificially lowered price to buy at that is cause by artificial intervention in the pricing mechanism.
I don't know about you, but if I was interested in buying a new care, I could think of nothing better than some artificial intervention in the market that caused prices to plummet below their intrinsic value, giving me an opportunity to buy at a discount.
The further it falls, the bigger the gift.
If ever you find yourself getting queasy about something you've invested in on the basis of the fundamentals because of near-term price action, the very best thing you can do is pull back out the 10-Q and go back over the numbers. In the case of Sandisk, I'd start by going back and looking at more than $7.50 a share in net cash that you own for each share.
Next, I'd look at the royalties income. This company could shut down its operations entirely and it would still be pulling in a yield better than most businesses. In many respects, at the current price, you are darned near buying their entire operations for free.
And if that's not enough, consider that they've just entered a business that is the hottest in all of consumer electronics. With the primary cost of digital music players being their memory, isn't it reasonable to believe they've got more than a passing shot at winning a chunk of that market? Have a look at what the iPod has done for AAPL. Their PC business has been stable, but barely growing. That company has added $10 billion in market cap in the last 9 months.
What if ... a year from now, SanDisk has evolved its player, and the shift to CF memory in digital music players has begun to accelerate, just as we enter the holiday shopping season. What if ... that leads to SanDisk picking up say, 10% of the digital music player market. Assuming that the market grows at the current pace, it is not unreasonable to think a year from now SanDisk's market cap is jacked up by 1-1.5 billion just from that alone. $1.5 billion in market cap equates to nearly 10 points on the share price.
why not? If you're an investor with something more than teeny-tiny time horizon, you should be hoping there IS a short attack on SNDK. Unless you are talking about a short attack on a company without longer term positive prospects, short attacks ALWAYS wind up pushing the stock below equilibrium for a short period of time. It's the nature of the biz. An investor can hope for nothing more than a temporarily artificially lowered price to buy at that is cause by artificial intervention in the pricing mechanism.
I don't know about you, but if I was interested in buying a new care, I could think of nothing better than some artificial intervention in the market that caused prices to plummet below their intrinsic value, giving me an opportunity to buy at a discount.
The further it falls, the bigger the gift.
If ever you find yourself getting queasy about something you've invested in on the basis of the fundamentals because of near-term price action, the very best thing you can do is pull back out the 10-Q and go back over the numbers. In the case of Sandisk, I'd start by going back and looking at more than $7.50 a share in net cash that you own for each share.
Next, I'd look at the royalties income. This company could shut down its operations entirely and it would still be pulling in a yield better than most businesses. In many respects, at the current price, you are darned near buying their entire operations for free.
And if that's not enough, consider that they've just entered a business that is the hottest in all of consumer electronics. With the primary cost of digital music players being their memory, isn't it reasonable to believe they've got more than a passing shot at winning a chunk of that market? Have a look at what the iPod has done for AAPL. Their PC business has been stable, but barely growing. That company has added $10 billion in market cap in the last 9 months.
What if ... a year from now, SanDisk has evolved its player, and the shift to CF memory in digital music players has begun to accelerate, just as we enter the holiday shopping season. What if ... that leads to SanDisk picking up say, 10% of the digital music player market. Assuming that the market grows at the current pace, it is not unreasonable to think a year from now SanDisk's market cap is jacked up by 1-1.5 billion just from that alone. $1.5 billion in market cap equates to nearly 10 points on the share price.
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