I think that VECO is a good buy at these price levels. The last few
weeks I have been buying some shares with an average entry level of
around $30. I keep waiting for some strong buying interest in the
stock, but so far, there has been little action. The stock went up 5
percent this past week from the previous Friday's close on 8/6, but
with average type volume.
I updated estimated earnings information this weekend from the
internet and made some comparisons to Friday's closing prices. The
results are shown in the table below.
First, I added "this years and next years" earnings together to obtain
a sum. Then I took that sum and divided by 2 to get an "average
earnings" for the 2 years. Then I divided Friday's closing price by
the average earnings to get a 2 year PE number. Finally, I sorted the
stocks using this PE number.
Using this comparison, VECO resides in the number 4 slot in the list
with an average PE number of 19. All of the other 36 stocks in the
list have PE numbers of 20 or higher. Some of the other "biggies" are
KLAC at 30, AMAT at 32, ASML at 52, and CMOS at 56.
Within the $3.50 per share sum for the next 2 years, the next years
earnings number is $2.06 per share. If the stock goes to $45 per
share, that is a forward PE of 22. Looks like that should be a very
reasonable number. I would say the stock could even go to $60 in the
near future, which would give a PE of 29, when compared to a lot of
other numbers in the table below. Ten of the 40 stocks in the table
show negative earnings for the next 2 years. 12 of the stocks in the
table show PE numbers of 50 and higher.
There have been comments that VECO may go down in the near future to
values in the "20's" - numbers like 22 or 27, which would be 2 year PE
numbers of 13 and 15 respectively. It seems like that performance is
highly unlikely, unless there is a lot of fear in the marketplace
about VECO's future performance living up to forward projections.
As another note, the PE of group sum is at 45. I sure like VECO
better at 19.
SUM
08/13/99 TWO AVE
CLOSE YEAR 2 YEAR
SYMBOL COMPANY PRICE EPS PE
MASK Align-Rite International 14.25 2.91 10
IMSC Integrated Measurement Systems 10.50 1.53 14
COHU Cohu 39.38 5.43 15
VECO Veeco Instruments 32.50 3.50 19
LRCX Lam Research 59.56 5.42 22
NANO Nanometrics 8.00 0.71 23
DPMI Dupont Photomasks 49.00 4.23 23
WJ Watkins Johnson 33.63 2.65 25
NVLS Novellus Systems 61.69 4.57 27
TER Teradyne 72.13 4.97 29
SFAM SpeedFAM 10.25 0.68 30
KLAC KLA Instruments 66.00 4.34 30
ASYT Asyst Technologies 28.44 1.84 31
AMAT Applied Materials 69.75 4.33 32
PLAB Photronics 28.63 1.60 36
ATMI ATMI Inc 32.25 1.80 36
HELX Helix Technology 28.03 1.53 37
PHTN Photon Dynamics 15.38 0.68 45
MTSN Mattson Technology 11.81 0.47 50
LTXX LTX 11.69 0.46 51
ASML ASM Lithography Holdings 60.88 2.35 52
CYMI Cymer 31.00 1.17 53
KLIC Kulicke & Soffa Industries 25.38 0.92 55
CMOS Credence Systems 40.00 1.44 56
BRKS Brooks Automation 25.25 0.88 57
EGLS Electroglas 19.31 0.66 59
ETEC Etec System 38.38 1.06 72
UTEK Ultratech Stepper 14.38 0.38 76
MICN Micrion 12.63 0.06 421
SFLX Smartflex Systems 10.19 0.01 2038
AFLX Adflex Solutions 3.69 -0.22
ASEC Aseco 2.31 -0.29
CFMT CFM Technologies 8.13 -1.11
PRIA Pri Automation 28.75 -0.13
SVGI Silicon Valley Group 11.81 -0.30
TGAL Tegal 3.00 -1.11
FSII FSI International 6.94 -1.50
SMTL Semitool 11.31 -0.19
WFR MEMC Electronic Materials 15.50 -3.83
GSNX Gasonics 15.13 -0.18
TOTALS/AVE 1066.84 47.55 45 |
