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Technology Stocks : Dupont Photomasks (DPMI)
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To: jeffbas who wrote (167)2/22/1998 11:01:00 AM
From: shane forbes   of 955
 
Jeffrey:

Yes the more I see about DPMI the more I like no doubt about it. One of these days I will look into it...

I am not so sure about sustainability of the recent price action in the semi-equips. I've said many times (starting from the day just preceding AMAT's c.call) that the sector is brushing aside a lot of bad news. I may be wrong and as the days go by and the stocks keep on increasing it certainly does not look like I was correct.

However the semi-equip BTB coming out presumably next week will show just how bad the business in the sector has got. I think it will have dropped quite a few points.

P/Es are never an easy thing with growth companies even if they are quasi-cycical(!). Especially when the sentiment fluctuates wildly as it has yo-yo'ed in the last few months. Market assessments of reasonable P/Es will therefore be all over the map as it tries to figure out what the next leg of the semi-equip business cycle is likely to begin.

I like TSO's 25-30 esp. over the next few years when I expect companies like DPMI to do well. Of course these companies in the semi-equip area always get their P/E penalized because of the unpredictability and variability in earnings growth. Still esp. now or perhaps better over the next few quarters when I suspect the semi-equips are entering a major new cycle I would not pay too much attention to P/Es. Instead I would emphasize the end demand for masks and work my way backwards and see how much DPMI should generate in revenues. Their earnings will zoom because of the high fixed costs nature of this business.
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