Why is TER (Teradyne Inc) on losing it's value?

Question

Does anybody know why this stock is heading on a downward death spiral? There is no bad news about the company, and they don't have a bad quarterly report anytime soon. Since Wednesday, it went from about 11.20 to 10.32 for no reason at all. Does anyone know why? There has to be some explanation as to why it's losing it's value.

Any help is appreciated.

Thanks!

Answer 1

I don't like to be too negative on TER. ...but TER is not a growth stock, plain and simple. Yes, it has a great set of products, a great balance sheet, a good surge in profits every now and then and has just received several upgrades. ...But it is in a segment (ATE) of the market that has more suppliers than demands warrants. The ATE segment peaked in 2000, and has been heading down every since. Demand and prices on an aggregate level for ATE are continuing to fall. The whole sector is in a state of consolidation. TER stock has continued to move down with it's peers over the last 8 years and will continue the trend.

The second problem is that TER is more sensitive to a weak technology market, than most other Tech. stocks, because the purchase of high priced ATE equipment is the first expense to be reduced or eliminated in a down turn, by it's customers. There is no need to buy more test equipment when demand for electronics at the retail level is not growing ...so TER stock will continue to fall in anticipation of weakness over the next six months to a year, even if TER has a blow-out quarterly report on 7/21/2008. The stock market is beginning to price in the next six months not the last six months...let's hope that TER has strong projections for the next quarter, or this stock could move to $8 or $9 a share?