Monday, December 04, 2006

Calls of Note Part 5

- UBS notes NAND spot pricing has strengthened over the course of the last week and is now once again growing week on week. They believe this could be a near-term positive for shares of SanDisk (NASDAQ:SNDK).

Given suppressed valuation levels and the now rising spot market, the firm beieves the shares could see some momentum, which could be further fueled by market speculation regarding new products going into CES and a potential Apple iPhone going into MacWorld, both events in early January. Firm's Price Target on shares of SNDK is $55.

Although NAND spot is showing encouraging signs of strengthening, they note that their tracking of retail pricing trends is showing precipitous weakening. While this weakening is most likely a reflection of typical holiday promotions, it underscores the competitive pricing pressures being faced by the industry, pricing pressures that they expect to endure into 2006.

Notablecalls: SNDK is a trading stock. Merrill was negative on SNDK on Nov 29 and the stock went down. It then got squeezed higher and now we have some positive comments from UBS. With all the negativity surrounding it I suspect positive comments may work even better.

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