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LCD: Double-Barrel Buys
04/30/2004 12:00 am EST
"In the tech patch, LCD-related stocks are among the hottest themes going," says Bryan Perry, technical expert for ChangeWave Investing and editor of the excellent weekly trading service,The Tactical Trader. Here are some new LCD plays.
"In our view, the LCD trend is only going to pick up speed as the year progresses, with LCDs very likely being the number-one gift item on the holiday shopping list. It is a trend that will continue to get a lot of press and attention by fund managers, keeping the sector in the spotlight. None of the companies that make the components for the LCD makers have reported earnings yet. I believe that when the first companies do report numbers and outline demand for LCD screens, the sector as a whole will make a big move up. The timing of getting long a couple names in front of this earnings season should pay off handsomely and is the basis for our new double-barreled buy recommendation for two LCD-related companies, Genesis Microchip (GNSS NASDAQ) and Orbotech (ORBK NASDAQ). Both stand to benefit greatly from demand curve we see in LCD sales.
"Genesis Microchip, a world leader in the development of image processing technologies for LCD TVs and other consumer display products, today announced that Samsung Electronics, a global leader in the consumer electronics industry and world's largest provider of display panels, selected GNSS's gm2221 display controller for its new 15-inch, 17-inch, and 20-inch LCD TVs, which are scheduled to be available worldwide by the end of this month. This is a huge piece of business for GNSS and will only help boost guidance up. The stock just registered a double proprietary buy signal in the latest week, signaling to us that a strong rally in the shares lies ahead.
"Orbotech designs and manufactures automated optical inspection (AOI) systems and imaging solutions in the production of LCDs. Its innovative technologies enable customers to achieve the increased yields and throughput essential to remain at the forefront of electronics production. They are a supplier to AU Optronics and Samsung as well. We want to stay right in this 'food chain' where most all participants are seeing business ramp aggressively higher. The stock successfully tested its 200-day moving average during the past two months. Orbotech, like Genesis, recently gave us a proprietary buy signal. Buy them both and saddle up for what should be two big earnings reports."
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