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Technology Stocks : Ultratech Stepper
UTEK 30.230.0%Jun 5 5:00 PM EST
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To: Ian@SI who wrote (704)5/7/1997 6:57:00 PM
From: Aaron Cooperband   of 3696
 
Ian -

Re: "Mr Pang, I've scoured UTEK's annual report for a product description of this thin film tape market you think they're losing. Closest I can find is Thin Film head."

I asked my broker to send me a copy of Mr. Pang's report. It states:

"Ultratech's shipping mix has shifted from being two thirds semiconductor manufacturing generated to the same fraction being derived from the thin film head (TFH) market. While thin film head demand appears to be quite strong, we believe a number of systems may have been accelerated into the previous quarter, leaving TFH backlog and therefore visibility, substantially reduced."

Mr. Pang identified the TFH market correctly (not thin film tape) and pointed out a backlog concern that I haven't seen mentioned on this thread.

After AMAT's surprise earnings earlier this year all the Wall Street analysts started raising their semi equipment manufacturers estimates, expecting that the industry recession was over. This made stock prices rise and made us investors very happy. Now, many analysts are realizing that the recession may not be over or that growth may be slow for the next year or so, so they're revising their opinions.

Mr. Pang's report follows this pattern and is neither better nor worse than what other analysts have produced. He reduced his estimates for FY98 from $1.90/shr to $1.60/shr using the slow recovery scenario. He then uses a market multiple of 13X vs. 1998 P/L to achieve a $20 stock price target.

As a UTEK stockholder I don't like what he said either, but his concerns are certainly valid.

Aaron
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