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Technology Stocks : LTX Corp. (LTXX)
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To: Rob-Chemist who wrote (1438)3/11/1999 9:23:00 PM
From: The Joker   of 2126
 
In response to your reply: CMOS is also having problems, that is no
secret. The point I was trying to make is that over the past several
years CMOS was getting a lot of business at the expense of LTX because
the Delta could not compete on a cost/performance basis. However, there are enough of these type of machines in the world to test the current generation of IC's. The market is simply saturated. That is why CMOS is struggling and also partly true for LTX, but LTX's problems run more deep. LTX,CMOS, and TER are all working hard to get the next generation tester to market. Fusion will have success in that it will keep LTX in business but it will not take over the market like the geeks at LTX predict. TER will come out with a better machine and will manage to make higher profit margins.

The book to bill ratio can be very deceiving. LTX was hardly shipping anything for a couple quarters. All of a sudden companies ordered some machines, so at least for this past quarter the book to bill looked good and it will probably stay that way for the rest of the year if the semiconductor industry remains healthy. The problem is that even if LTX gets business they can not translate it to earnings. If you look at the yahoo research page for LTX you will see that the earnings growth for the past 5 years has been -225%. That is simply horrible.

At this point I would hold on to the stock for 7 to 8 and sell. I would not buy it again until the next downturn and buy it around 2. This stock has been doing this for ten years now along with other stocks in this industry.
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