Stock Question??

I'm currently looking at this stock right now, United Microelectronics Corp. (UMC). I need some input on whether this is too risky of a trade to be getting involved in. Give me some feedback and analysis on what you think.

First thing I look at is if the company is issuing dividends. Its a Mid Cap stock (meaning is of medium size) and its issuing dividends. This tells me that they are not a growth stock, they are an income stock. When you have a small company like this, you want it to be growth. I want the company to spend this dividend money on something more constructive, like expanding their business. Since they cant do that, they issue dividends to retain and attract investors...which is a bad sign right off the bat. Generally, they attract two types of investors: inexperienced ones, who are looking solely at is market price and maybe the dividend and the other is the predatory hedge fund manager of mutual fund manager that is looking to prey upon the first investor type by short selling the stock... Now it has a short ratio of 1.8, so this means there isn't too much of the second. Which is nice, but if you own this, be cautious of this ratio, cause if it increases you NOW know why!!!
Debt wise, it has a nice current ratio. I am merely concerned with debt, as it is not the time in the market to be indebt.
Now analyst estimates are placing this stock as having a growth rate next year, '08, at 0%. Not a good sign. And their projected P/E is looking to be around 19, which is currently under 17.
Just looking at these figures, i think the stock is not worth the money right now. I would suggest looking to a flight to quality in the year to come. Maybe next year, around this time, return to this stock and check it out. We are looking at a turbulent year next year...look at Moody's (not suggesting this because Warren Buffet dumped a truck of money into it, just that it is a good company). It is anticipated at trading between $70-$80 by the end of next year. With that increase in money, you could then look to this UMC and see if its a good speculation stock.

hope this helped.

The risk on this stock appears moderate to me. It has earnings, a moderate PE, and pays 5.4% in dividends. Although the cost per share is low, the capitalization is high. You should look at your age as the primary indicator of the amount of risk you can take. When you are young, you can take more risk. As you approach retirement you should decrease it.

Well, that depends on your current financial position. I wouldn't invest in this stock as your only stock, or one stock of a small portfolio. This could be termed a more risky investment. If you had a well balanced portfolio of other stocks, then yes, this might fit in as part of a more small-midcap/sector fund investment.

All individual stocks are too risky for individual investors. Select a no-load indexed mutual fund instead.