Friday, June 7, 2013

Investopedia: Will Chatter Around Samsung Shipments Spook Components Stocks?

One of the favorite games of sell side analysts covering the smartphone/mobile device sector is “Guess That Shipment Number”; using various channel checks and supplier interviews to project shipment numbers for phones from leading manufacturers like Apple (Nasdaq:AAPL) and Samsung Electronics (Nasdaq:SSNLF) and go to the buy-side with supposedly proprietary calls. This time it's Samsung's turn, and analyst downgrades tied to flagging sales of the Galaxy S4 have sent the stock down more than 6% in South Korea.

As Samsung Electronics trades only as an unsponsored ADR in the U.S. (and an illiquid one at that), the impact to stocks like Apple, Nokia (NYSE:NOK), and the component suppliers may be the more relevant factor to consider. While it would be very hasty to call these lower shipments (if the stories are true) the end of Samsung's smartphone boom, it's a good reminder that over-booking and product launch cycles introduce a lot of uncertainty into this sector.

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