I just listened to the CC. I just do not understand why the stock sold off and there were two downgrades.
There was the issue of a dip in margins next Q, but it was explained by the hardware/software mix for the Q. In fiscal Q1, 2000, margins are expected to return to the low 40's. Also, the last questioner tried to get Mitch to give an indication of revenue next Q. All he would say is he expects a sequential increase. Mitch also said at some point headcount may ramp faster than expected to handle an increase in business. To me, this is no problem.
Otherwise, their business is booming, they are executing well, and they are gaining share. One analyst mentioned the Hitachi win, which was big.
As for the stock price, go figure. I suspect that most brokerage houses are telling their best clients to get in. I note that of the two downgrades, one was H&Q, which initiated coverage 2 weeks before. (They obviously didn't do much research.) The other was Merrill, who thought that the rumor of PRIA not getting into Intel's 300mm pilot was a big deal. (The rumor isn't true.) Idiots. Mitch said he will be there, and he is putting 300mm compatible tools in their 200mm fabs now, so they can be shown to work well. Intel put PRIA on the map. Without evidence t the contrary, I would expect PRIA, the mkt leader, to be there.
For a stock that was bid up to the 40's in January on 300mm anticipation, the current price, six months later, is a steal.
Jay |
