Ian,
I meant no disrespect toward anyone posting about a recovery among the semis. My comment about the thread was meant to be a little tongue-in-cheek. Recovery or lack thereof in the semis or the economy as a whole is certainly relevant for the semi-equips. I just think that the signs still point more toward the lack thereof.
I also believe that even the most optimistic permabull understands that there's a major recession in full bloom for the chip industry.... and that it's already been fully priced into most sector stocks. In fact, looking at some of the niche leaders being priced well below book, some near or below net cash, the market is expecting an out and out depression for this sector.
I agree that the semi recession has already been priced/overpriced into the stock prices. It seems as if the market isn't quite sure whether the sector will ever recover, which it almost assuredly will, with a vengeance. But if the recovery among semi-equips is indeed still a year or two out, the stocks may not recover for a while yet, and with the overall market going down, now may not be the best time to take advantage of the blood flowing in the streets.
For example, I have been interested in SFAM for a while and had set $23 as my buy target. However, when the probable length and depth of the downturn started to become apparent, I decided to put all my semi-equip investments on hold. With SFAM, it was a good thing, since they are now trading around $11-12, although I still believe they will be a $30+ company in a few years.
Regards,
G.P. |
