OCZ's Loss is a Win for Flash Memory Leaders

OCZ Technology Group, Inc. (NASDAQ: OCZ) is really not that well known by many investors.  Still, today it is proving that sometimes the tail can wag the dog.  Imagine when a drop of almost 22% in its shares on news of an altered sales outlook really boosts its much larger rivals. The blame for its lower sales outlook was due to constraints in NAND flash memory used in its solid-state drives.

SanDisk Corp. (NASDAQ: SNDK) is the independent leader in flash memory and its shares are up almost 8% at $43.77.  DRAM leader Micron Technology Inc. (NASDAQ: MU) is getting deeper into flash with its Elpida deal and its shares are up 7.4% at $6.65 so far today. Sterne Agee analyst Vijay Rakesh was very positive on flash memory pricing trends even in late-August.

The market cap of OCZ is a mere $283 million and it is involved in solid state drives and computer components. Stern Agee has noted that these will benefit from tight supply chain discipline and that the decline in flash memory prices in the first half of 2012 has now flattened out.

Shares of OCZ hit a new 52-week low of $3.86 this morning, but shares are now “only” down by almost 22% at $4.19.  The prior 52-week range was $4.14 to $10.05.

We would also note that the Market Vectors Semiconductor ETF (NYSEMKT: SMH) is up by 2.7% to $33.09 against a 52-week range of $28.86 to $36.17.

Maybe the tail can still occasionally wag the dog.


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