limtex, if I may chime in. In general stock corrections in semis of 50% plus are common mostly during cyclical downturns in the business of this generally leveraged sector (in terms of earnings leverage).
It remains my conviction that an end to the current semi cycle is not apparent at present and that the semi sector downgrade of several brokerages has been pre-mature.
From LLTC's earnings report a couple of days ago:
"According to Robert H. Swanson, Chairman of the Board and CEO, "Fiscal 2004 was a very strong year for Linear with momentum building steadily as each of the quarters had accelerated year over year growth in sales and profits. Accordingly, we closed the year with our strongest quarter growing sales 14% and profits 16% sequentially over the March quarter. Typically the summer quarter, which we are entering, is the quarter with the lowest sequential growth, generally low single digits. However, this year, given the broad based strength we are experiencing in our marketplace, should these current trends continue, we expect to have a seasonally strong start to our new fiscal year with sales growing roughly 5% to 7% sequentially from the quarter just completed."
If this very representative company in that sector experiences less than typical seasonal weakness during this slow quarter, this is what I would term a "positive divergence in fundamentals" and contradicting the downgrades of "them". I think these stocks will come back once more during the coming months (off course associated with the typical upgrades after they are 20% plus higher).
FWIW
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