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Paul Rogers currently serves as President of Alpha Investment. Alpha Investment was organized in 2009 to provide exceptional Investment Advisory services to the public at large. Alpha Investment specializes in performance-orientated discretionary investment accounts. Alpha's principal's have... More
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  • What AAPL means to the rest of the PC suppliers

    Last night, Apple reported sales of 4.19 million iPads.  This was below street expectations of 4.5 – 5.0 million units.  Apple claimed that they were supply constrained, which eased throughout the quarter and was in balance in September.

    Based on our industry contacts, we believe the current run rate of iPad production volumes are 2 million units a month, with a desire to further increase production to 3 million units per month.

    Last week, both Intel and AMD reported and it’s obvious they struggled to meet their pre-announcements.  The problem is that while the companies may have thought they had fully absorbed the disruptive effect of the iPad on their netbook and notebook business, they now know that is not the case.  At a shipment rate of 2 million units per month, Apple will ship at least 6 million iPads this December quarter.  Incrementally, that’s an additional 1.8 million units.  Considering that the supply chain is still trying to ramp to an eventual level of 3 million units per month, it is quite possible that Apple ships 7+ million iPads.  This would be an incremental 2.8 million units.

    On Intel’s conference call, they mention that the industry was building 1 million PCs a day, or 90 million per quarter.  The combined guidance of Intel and AMD was for about 3% sequential revenue growth in Q4.  Was this guidance given with the knowledge of 1.8 – 2.8 million incremental iPads to be sold?  Or did they assume that they had absorbed most of the incremental iPad hit?

    Tonight Western Digital reports; with Seagate tomorrow night.  Now that they know the extent of the iPad hit in Q3, as well as the coming hit in Q4, will their guidance stand up to expectations?

    It seems to us Q4 will again be a stretch for Intel, AMD and the rest of the PC chain.  And this time they won’t be able to stuff the channel again.

    As always, please contact us directly before investing.

    Disclosure: Alpha Investment runs discretionary accounts for clients. Alpha Investment clients have positions in INTC, AMD, STX and WDC.
    Tags: INTC, AMD, STX, WDC, AAPL, Technology
    Oct 19 11:01 AM | Link | Comment!
  • INTC: Beating the Number in an Ugly Fashion

    Last night, Intel reported slightly above it's previously lowered guidance.

    We believe the following analysis won't be in the Street's reports tomorrow.  As such:

    Intel sequential growth in actual $:

    Revs:           11.102 vs. 10.765 B
    Rev Growth:     .337 B

    Acc Rec:     2.911 vs. 2.430 B
    AR Growth:    .481 B

    Acc Rec Days in June: 20 Days

    Acc Rec Days of Incremental Sales in Sept Qtr:  128 Days

    In a 90 day quarter.

    Up from 20 Days in June.

    Based on Intel's report and our industry contacts, we believe Intel utilized some of their unofficial "Sales Reserves" in the Sept Qtr.

    Intel is still cheap, though current business is a little soft.  Unless the Street focuses on Receivable growth in the quarter, some of our shorts could drift higher until they report next week.  Our short ideas didn't start the June Qtr with 20 days of Receivables.  They don't have this luxury.

    As always, please contact us for specifics.

    Disclosure: Intel is a recommended long and typically held in client accounts at Alpha Investment.
    Tags: INTC
    Oct 13 11:23 AM | Link | Comment!
  • Asia Update
    Updates from Asia on:

    Please contact us for details.

    Disclosure: Alpha Investment may be recommending postions to clients in any or all of the names listed. Contact us for details.
    Sep 30 3:51 PM | Link | Comment!
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