Stock Du Jour

Click Ahead in Time

Atlanta, GA

I'm usually in favor of a little volatility in the market, but lately I could trade in my securities' license for a job as poster boy for Tagamet. On the other hand my budding addiction to Tums could be the result of a typical American diet as decried by Richard Simmons, Jenny Craig, and of course, my Mom. In fact the other day while I was on the road to gastrointestinal hell I was in a deli, and I noticed they served the tuna salad with an ice cream scooper. It seems somehow blasphemous to use an ice cream scooper on tuna, but I'm sure at this very moment in an alternate universe, someone is complaining about ice cream being served with a tuna scooper. I think I watch too much Star Trek*.

Perhaps this is the alternate universe, since high profitability is now a good reason to punish a company's stock, instead of reward it. Take for example the case of Trident Microsystems (NASDAQ: TRID). Last week Trident announced record revenues (+70%) and earnings (+383%), and were at the high end of analysts' estimates. Since then this previously $20 stock has lost 30% of it's value, when it should have gone the other way. Some of this loss can be attributed to competitors' problems: one announced weak earnings, another had an inventory build up. Despite the apparent sympathy exhibited by the stock, Trident appears to be immune from their neighbors' maladies.

In english here's what this means. The stock is down to 13 1/2, and I think any purchase made below 20 is a good thing. Whenever I prognosticate (in public, too) I usually aim for a short term 6-10% net return. In this instance, I expect a whopping 30-100% return this year.

As usual you should consider this newsletter an aid to your due diligence, not a substitute for it. If you'd like to take this up further and begin a business relationship, you can contact me by, or the phone at 404-320-7620.

Martin Dekom

* Spock with a goatee?

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