Friday, January 13, 2006

German Crooks Are Smarter

In this article, the Fool exposed the Wall Street crooks. Basically, when the crooks rate a stock at buy, it's because they own the stock, if the crooks rate a stock strong buy, it's becase they want to dump the stock.

But that's too obvious, isn't it?

Today, Deutsche Bank downgraded AMD to sell, its analyst Ben Lynch cut AMD's target price to $26, because he believes INTEL is rolling out new chips for servers, desktops and mobile and 2005 Q4 will be AMD's last swan song. Incidentally, Ben Lynch has a zero (0) star rating on EPS estimate accuracy for most of the stocks he covers, which is kinda lame for a person that is supposed to earn his food by writing analyst reports -- a monkey could do a better job by throwing darts and hitting target 50% of the time.

Of course, we know from the Fool.com article, that the analysts have their motives, and being accurate is not their goal. Ben Lynch's analysis looks like both an AMD downgrade and an INTEL upgrade -- only two companies compete in 99% of the x86 market. Let's check Deuthsche Bank's INTC holdings on Nasdaq.com, we found:

DEUTSCHE BANK AG\
9/30/2005
65,374,120
(23,070,121)
(26.08%)

see? Deutsche Bank held 88 million shares of INTC previously, but had already dumped 23 million shares, as of September 2005, it still had 65 million INTC shares to dump. INTEL's insitutional ownership dropped to 56.6%, there are more institutional sellers than buyers, but Deutsche Bank stood out as the largest seller of INTC shares. Another German bank, the DRESDNER BANK AG, sold 17.9 million shares of INTC, or 97.9% of its INTC holdings. Remember, AMD's FAB30 and FAB36 are in Dresden, Germany, and the folks there know what AMD has on its shipping docks and where they are heading. Perhaps, not by coincidence, the DRESDNER BANK AG started heavy buying of AMD stocks.

Clearly, if Ben Lynch tried to do a straight upgrade of INTC to dump it at higher price to other investors, he would be caught red handed. Being a smarter person, he embedded the INTC upgrade message in downgrade of AMD to sell. Of course, INTEL investors saw the AMD downgrade and were all cheered up, now they can comfortably buy the shares Deutsche Bank was dumping.

But look at this, folks, after fragging INTEL Presler with Athlon 64 FX60, and fragging INTEL Paxville with old Opteron 880s, AMD is ready to mass frag INTEL with 12 socket AM2 processors. AMD will soon release the socket AM2 Athlon 64 X2 5000+ and the FX62 (2.8GHZ), plus a slew of more powerful ones.

INTEL's Merom is not expected until Q4 2006, and the speed will be at 2.33GHZ due to heat problems. That means AMD will enjoy 100% of 64 bit mobile market for another 270 days. Windows Vista x64 is coming.

I also looked at AMD's institutional ownership data as 09/30/2005, there were two houses had the largest increase in AMD holdings. One is FRIESS ASSOCIATES LL... went from 0 to 7.3 million AMD shares, and the other is TURNER INVESTMENT PA... from 0 to 4.68 million AMD shares. So I look at their INTC holdings, surprise, both sold out their INTC shares.

1 Comments:

Blogger smallormidcapman said...

It will be very interesting to see the institutional ownership changes during Q1 2006. I am especially interested in what the firms do that employ Joe, Ben and Hans to name a few.

As Chartered and Fab 36 continue to ramp, the big question will soon be answered: "Who is all this extra capacity for?". Dell? Google? Higher demand in general? 2006 is gonna be a year to remember for this stock to be sure.

I enjoy your blog btw Sharikou...nice job.

5:51 PM, February 02, 2006  

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