FOOL PLATE SPECIAL
An Investment Opinion by Randy Befumo

The Last Piece of Info

Panic about pricing in the storage technology arena continues to plague the disk drive manufacturers. Comments by DELL COMPUTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %> Chief Executive Michael Dell and rumors that INNOVEX <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INVX)") else Response.Write("(Nasdaq: INVX)") end if %> had seen orders from READ-RITE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RDRT)") else Response.Write("(Nasdaq: RDRT)") end if %> decrease conspired to send the entire drive sector into the dumper. This morning's press release from Innovex confirming that order flow from Read-Rite had in fact fallen was enough to send traders into apoplexy, dumping shares of each and every storage technology-related firm. Today ends a rather difficult weak for the drive companies, which were almost all trading near their 52-week highs only two weeks ago.

''I think the memory market is softening a bit in our favor, and I would also put disk drives in the same category,'' Dell said on Wednesday evening, as reported in the Motley Fool's conference call synopsis. These comments combined with now-confirmed rumors that Read-Rite had cancelled orders of fine wire for suspension of drive heads originally scheduled for delivery in the third quarter incited panic among investors. Innovex stressed the press release that although orders from Read-Rite are down, increased business from Yamaha and QUANTUM CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QNTM)") else Response.Write("(Nasdaq: QNTM)") end if %> made up for the loss. Innovex still intends on reporting a sequential increase in revenues in the fiscal third quarter on margins that will meet or exceed historical margins. Innovex rose $3/8 to $29 1/2 on the news, although it is still down from $36 7/8 at the beginning of the week.

Unfortunately for the rest of the drive group, Read-Rite's order cancellation was not viewed in a positive light. Despite the fact that it has increased its orders with Innovex, Quantum tumbled $2 3/8 to $36, down from $45 1/8 at the beginning of the week. SEAGATE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SEG)") else Response.Write("(NYSE: SEG)") end if %> did not fair much better, slipping $2 to $40 3/8, down from $48 1/2 at the beginning of the week. Read-Rite was off $1 5/8 to $20 3/8 after starting the week at $25 1/8. Read-Rite supplier, HUTCHINSON TECHNOLOGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HTCH)") else Response.Write("(Nasdaq: HTCH)") end if %> slumped $2 1/4 to $26 1/8. The concern here continues to be uncertainty over what will happen to pricing on drives and drive components. The tight supply since September has kept prices very stable, but with inventories building, investors are worried that pricing will deteriorate and future earnings expectations will not be made. Each piece of incremental information that confirms this idea incites a riot of trading, while any information to the contrary is ignored.

UPS

CARDINAL HEALTH <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CAH)") else Response.Write("(NYSE: CAH)") end if %> soared $4 to $57 1/2 after Standard & Poor's announced that the company's stock would become part of the S&P 500 Index, replacing CONRAIL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CRR)") else Response.Write("(NYSE: CRR)") end if %>.

Medical device manufacturer MEDTRONIC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MDT)") else Response.Write("(NYSE: MDT)") end if %> soared $4 7/8 to $71 3/4 after reporting fourth quarter earnings per share (EPS) of $0.62, in line with estimates and up 21% from the year-ago quarter.

MASTEC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MTZ)") else Response.Write("(NYSE: MTZ)") end if %> continued to soar this morning, up $2 5/8 to $38 on no specific news released today. On Tuesday, the company announced it was buying a 50% interest in a Brazilian telecommunications infrastructure builder.

Business Week's "Inside Wall Street" column quoted hedge fund "pro" Mike Lauer as stating that pending spin-offs at TECH-SYM <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TSY)") else Response.Write("(NYSE: TSY)") end if %> would help to boost the stock price toward his target of $59 a share. Shares rose $1 3/8 to $31.

STRIDE RITE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SRR)") else Response.Write("(NYSE: SRR)") end if %> also benefited from a mention in Business Week, jumping $3/4 to $14 1/2 after the highly unreliable "Inside Wall Street" column reported rumors that the company would consider a bid in the $20s.

"Money pro" Fran Saldutti, whatever the heck a "money pro" is, was positive on Year-2000 solutions provider CRYSTAL SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CRYSF)") else Response.Write("(Nasdaq: CRYSF)") end if %> in Business Week's "Inside Wall Street" column, pushing the stock up $1 1/8 to $22 3/4.

WESTINGHOUSE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WX)") else Response.Write("(NYSE: WX)") end if %> popped up $1 13/16 to $18 13/16 after the president of its CBS unit, Peter Lund, resigned. Montgomery Securities also initiated coverage of the industrial firm turned broadcaster with a "buy" rating.

Television broadcaster PRICE COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: PR)") else Response.Write("(AMEX: PR)") end if %> will acquire PALMER WIRELESS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PWIR)") else Response.Write("(Nasdaq: PWIR)") end if %> for $17 1/2 a share in cash in an $880 billion acquisition. Palmer shares rose $4 3/32 to $16 5/32 on the news.

MEDAPHIS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MEDA)") else Response.Write("(Nasdaq: MEDA)") end if %> jumped $15/16 to $8 1/4 after the company completed an initial public offering (IPO) of its HEALTH RECOVERIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HCRI)") else Response.Write("(Nasdaq: HCRI)") end if %> unit at $14 a share.

New York-based ACC CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ACCC)") else Response.Write("(Nasdaq: ACCC)") end if %> continues to rise, climbing $3 1/16 to $24 3/4 after yesterday's "buy" recommendation from Lehman Brothers. The long-distance and local phone service provider earned a $38 price target from the analyst.

BTG INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BTGI)") else Response.Write("(Nasdaq: BTGI)") end if %> rose $3/4 to $13 after the ailing contractor announced it was acquiring Nations Inc., a New Jersey-based engineering firm, for $10 million, plus the assumption of $3 million in debt. Nations Inc. had $45 million in sales last year.

PCS infrastructure builder OMNIPOINT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: OMPT)") else Response.Write("(Nasdaq: OMPT)") end if %> popped up another $1 1/4 to $13 9/16 as speculation builds that the company is "ripe for foreign investment." The company is currently building out the New York PCS area.

MASTECH CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MAST)") else Response.Write("(Nasdaq: MAST)") end if %> powered ahead $1 3/8 to $18 1/2 after the firm reported that it had contracted to provide Year 2000 services to FLORIDA POWER & LIGHT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FPL)") else Response.Write("(NYSE: FPL)") end if %>.

CIENA CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CIEN)") else Response.Write("(Nasdaq: CIEN)") end if %>, a recently public telecommunications equipment company, rose $5 1/8 to $44 after posting strong second quarter earnings. Wessels Arnold & Henderson raised fiscal 1997 and 1998 estimates.

Semiconductor equipment component manufacturer UNIPHASE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: UNPH)") else Response.Write("(Nasdaq: UNPH)") end if %> jumped $4 5/8 to $56 3/4 on no specific news. The company signed a supplier deal with industry giant KLA TENCOR <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: KLAC)") else Response.Write("(Nasdaq: KLAC)") end if %> last week.

DOWNS

HEALTH MANAGEMENT SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HMSY)") else Response.Write("(Nasdaq: HMSY)") end if %> plunged $1 1/8 to $5 1/4 after the company said it saw a second quarter loss of $0.07 to $0.08 per share before a one-time gain. Merrill Lynch cut its rating on the company to "long-term neutral."

Software developer TALX CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TALX)") else Response.Write("(Nasdaq: TALX)") end if %> fell $15/16 to $4 11/16 when it reported fourth quarter earnings from continuing operations of $0.03 per share, below the $0.08 per share that analysts were anticipating.

ROY F. WESTON INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WSTNA)") else Response.Write("(Nasdaq: WSTNA)") end if %> dropped $7/16 to $2 5/8 after William J. Marrazzo resigned as president and chief operating officer of the tiny company.

Multimedia product and imaging display system designer SIGMA DESIGNS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SIGM)") else Response.Write("(Nasdaq: SIGM)") end if %> dropped $5/8 to $4 1/8 after reporting a first quarter loss of $0.05 per share yesterday, well below expectations of a $0.07 per share profit.

PAGING NETWORK <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PAGE)") else Response.Write("(Nasdaq: PAGE)") end if %> received the unkindest cut today, falling $1 1/8 to $7 3/16 after Alex. Brown cut its rating on the paging company to "market performer."

Although no news could be found at press time, shares of design firm PARAMETRIC TECHNOLOGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PMTC)") else Response.Write("(Nasdaq: PMTC)") end if %> were down $5 to $42 3/8 on moderate volume.

CONFERENCE CALLS

APPLIED MATERIALS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMAT)") else Response.Write("(Nasdaq: AMAT)") end if %>
(800) 642-1687 (code: 353749) -- replay

INTERNATIONAL RECTIFIER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IRF)") else Response.Write("(NYSE: IRF)") end if %>
(Re: Restructuring)
(800) 633-8284 (reservation # 2765732) -- replay

HOME DEPOT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HD)") else Response.Write("(NYSE: HD)") end if %>
(402) 220-3005 -- replay after 12:00 noon until 5/23

DAYTON HUDSON CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DH)") else Response.Write("(NYSE: DH)") end if %>
(800) 633-8284 (reservation # 2703946) -- replay from 12:30-5:00 p.m. EDT

ROSS STORES INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ROST)") else Response.Write("(Nasdaq: ROST)") end if %>
(402) 220-1007 -- replay available from 5:00 p.m. EDT through 5/27 @ 8:00 p.m. EDT

WIND RIVER SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WIND)") else Response.Write("(Nasdaq: WIND)") end if %>
(800) 633-8284 (reservation # 2748792, code: 2589) -- replay
(303) 248-1201 (reservation # 2748792, code: 2589) -- replay (Intl. callers)

THIS WEEK'S CONFERENCE CALL SYNOPSES

DAYTON HUDSON <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DH)") else Response.Write("(NYSE: DH)") end if %> Q1 Call
HEWLETT-PACKARD <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HWP)") else Response.Write("(NYSE: HWP)") end if %> Q2 Call
STAPLES INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SPLS)") else Response.Write("(Nasdaq: SPLS)") end if %> Q1 Call
HADCO CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HDCO)") else Response.Write("(Nasdaq: HDCO)") end if %> Q2 Call
PAPA JOHN'S INT'L <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PZZA)") else Response.Write("(Nasdaq: PZZA)") end if %> Q1 Call
APPLEBEE'S <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: APPB)") else Response.Write("(Nasdaq: APPB)") end if %> Q1 Call
DELL COMPUTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %> Q1 Call
FAMILY GOLF CENTERS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FGCI)") else Response.Write("(Nasdaq: FGCI)") end if %> Q1 Call
HOME DEPOT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HD)") else Response.Write("(NYSE: HD)") end if %> Q1 Call
URBAN OUTFITTERS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: URBN)") else Response.Write("(Nasdaq: URBN)") end if %> Q1 Call

WE DELIVER - Get The Lunchtime News delivered
to your e-mailbox every afternoon!


FREE TRIAL ALERT
The Industry Snapshot

Ever wish you had the time to study different industries, looking for possible investments? Well, let us do the work for you! The Motley Fool is pleased to unveil our new Industry Snapshot. Each week, the six-page information feast offers you an overview of an industry, a closer look at a handful of major players in the industry, an in-depth examination of the most promising company in the group, and several tables of financial numbers so that you can compare the companies yourself. Complementing this product is its own online area at our website and on AOL, featuring more information on the companies and industries. The weekly Industry Snapshot is available by e-mail or fax. Check it out.

***And for a limited time only, sign up for a free two-week trial via e-mail -- just send a note to [email protected].***

Randy Befumo (TMF Templr), a Fool
Fool Plate Special

Dale Wettlaufer (TMF Ralegh), another Fool
Ups & Downs

Brian Bauer (TMF Hoops), and yet another Fool
Editing