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Technology Stocks : Speedfam [SFAM] Lovers Unite !
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To: Steve Patterson who wrote (2716)2/8/1998 10:43:00 AM
From: David Kuspa  Read Replies (1) of 3736
 
>>I am actually more scared by the possibility of AMAT taking market share from SFAM than by market conditions in general.<<

This has been my most pressing concern for the past year as well. But Mr. Sam's knowledge of where SFAM's tools stand in the industry has been very comforting. Mr. Sam, can you give us an update on the competitive factors currently and going forward?

Something really bothered me about the recent announcement of dramatically higher R&D and the construction of the new research center, besides affecting earnings per share. I know R&D is vital to any high tech company, but this was a dramatic jump. Could it be interpreted that SFAM's management is very concerned that others (AMAT) might be catching up and eroding their advantages in the market? This sounds a little like declaring war to come up with something in a hurry to keep them in the game, perhaps something not even related to CMP.

Lane, I don't think SFAM will break $20, but if it does, I would say it would be a great time to establish a long term position. I would even consider $20 to $22 a "buy". But always be prepared to see it drop to book or slightly below. I started buying SFAM when it was $15, then bought more when it fell to $11, which I believe was near book value at the time. It's not unusual for semi equipment makers to trade at or below book value. It's the cyclical nature of their business that creates a lower average P/B ratio.

D. Kuspa
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