Cohu, Inc. (COHU) Message Board

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Technology Stocks : Cohu, Inc. (COHU)

COHU 22.11

-1.3%

Nov 14 9:30 AM EST

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To: Henry D who wrote (1320)	7/16/1999 12:25:00 AM
From: KLINVESTOR	Read Replies (1) of 7825

HenryD, I have not finished my calculations yet but I would say you are in the same ballpark that I am. You identified the higher bookings than backlog although we are coming to different conclusions on the issue. Your concern is that orders may be topping off. My feeling is that COHU did an absolutely stellar job of responding to the huge jump in orders. They effectively sold a lot of product in the second quarter that was not in the backlog at the end of the lst quarter. While they normally (quarter to quarter does vary) have about one quarters sale in backlog what happened here leads me to believe during the 3rd quarter they will have sales in excess of the backlog or say a fair bit greater than $56 million. That could mean a significant jump in earnings from here even. One way to look at it would be to say lst quarter earnings were 14 cents and 2nd quarter earnings were 48 cents (increased 34 cents) that if that trend continued that would put them at 82 cents for the 3rd quarter. Following that logic may even be conservative because the BTB in the 2nd quarter was well ahead of the lst quarter so the growth in earnings during the 3rd quarter (over the second) should even be more than occurred in the 2nd quarter earnings growth over the lst quarter. A big issue is that COHU could effectively become capacity constrained if sales keep jumping through the roof. Cohu more than any other semi-equip seems capable of jumping their sales capacity. They responded very well in 1997 to some very large quarterly sales swings and I think that is what we are seeing now is an aggressive push by staff to keep ahead of the capacity constraint. It will be interesting to see the TER earnings release. TER has been as high as $78 in the past couple of days. COHU significantly beat their own earnings estimate and comfortably beat the 38 cent consensus estimate for TER. The point here is Cohu should see a significant jump in their share price over the next few months. Good luck to all. The Friday activity should be fun to watch! I will post my estimate soon although I think we are both in the ball park and I almost guarantee that those two last lonely analysts will not sufficiently increase their projections for the 3rd quarter and we will probably have a blowout then also. Speaking of analyst coverage COHU needs to push for more coverage. They did a good job early last year getting the coverage increased but they have let the issue slip this year. That is also a potential cause of COHU not keeping up with TER. If COHU wants to remain an independent company they need to ensure their stock price stays up with the other semi-equips on a valuation basis. No one benefits from being significantly undervalued!

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