Thursday, July 06, 2006

Calls of Note Part 2

- WR Hambrecht is defending Trident Micro (NASDAQ:TRID) after Thomas Weisel Partners, LLC downgraded the shares yesterday morning, citing what they believe will be share loss into 2007 due to Trident's HiDTV CX chip not sampling until Q3:06 and increasing competitive and pricing pressures which they believe will be evident in the second half of 2006. In addition, Weisel is also specifically citing what they believe to be market share losses at Sharp, one of Trident's top tier customers to Micronas and Broadcom into 2007.

Hambrecht believes that Weisel is likely downgrading near the bottom. They believe that Weisel is likely extrapolating from incomplete information on the overall impact of the single-chip transition and are not factoring in share gains at other Tier I flat panel TV OEMs which the firm has talked about. They continue to believe that Trident will likely report strong results for June and a robust outlook into the September quarter and should represent a great trade into the fall. Reiterates Buy rating and $39.00 price target on shares of Trident Microsystems.

Notablecalls: I'd be looking for a bounce today.

- Soleil's ResearchEquity Research is out on Optimal Group (NASDAQ:OPMR) saying that in their May 9 note, when they reaffirmed their belief that the co's fundamentals were "exceptional," with the stock closing at $15.74, and despite their long-term opinion, they advised clients that the stock would most likely "trade down hard on or about June 11," the date that current online gaming legislation was expected to pass the House of Representatives. On Wednesday, OPMR closed at $13.44, down 15% from firm's May 9 report (versus a decline of 4% in the S&P500 over the same period).

At this point, they feel comfortable recommending that clients either cover their shorts or add to a long position. While there is significant risk that the stock falls another dollar or so if a bill passes the House, considering the long-shot status of possible legislation passing the Senate, the firm feels the potential upside in OPMR's shares significantly outweighs any downside that exists over the next three months. Maintains Buy.

Notablecalls: Not actionable but good to know category.

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