[Briefing.com]
Axcelis Technologies (ACLS) 17 1/16 +1 15/16: If valuation were king, Axcelis Tech would have a loyal following by now.... The recent IPO trades at just 12x estimated FY01 earnings, sports a one-year PEG of 0.5, and based on price target issued this morning by Salomon Smith Barney has upside of 76% over the next year.... If picking stocks were only that simple.... The designer of ion implantation equipment (used in the fabrication of semiconductors) has been a compelling value since making its public debut July 11 at $22 per share. At its first-day peak of $30 per share, the stock traded at just 21.5x forward earnings. But attractive valuation did not prevent the stock from plunging 54% in the weeks after its IPO. Nor did the shares receive much of a lift from initiation of coverage by lead underwriter Goldman Sachs last week, even though Goldman started ACLS with one of the most aggressive ratings in its arsenal: Recommended List Buy.... So why is it that the stock is able to post an 11% gain on Salomon's less aggressive rating of Buy? One need look no further than the Philadelphia Semiconductor Index..... The SOX is trading 2.5% higher on the session, extending the rebound begun yesterday in the chip and chip equipment sectors.... This is a space that investors have been extremely anxious to re-enter over the past two weeks, as the stocks have come under pressure amid concerns that we may be nearing a downturn in the semiconductor cycle. This issue, coupled with general market disinterest in IPOs from the chip equipment space, has been responsible for weakness in ACLS shares leading up to today.... On an intraday basis, ACLS has been turned back from resistance at $17 1/4 twice today. Compelling valuation or not, this is now the level that ACLS must clear in order to prove to investors/traders that they should not begin taking their chips off the table.... To those who don't pay attention to technicals, this may seem a strange way to make an investment decision. But when Wall Street is as divided on the near-term fundamentals of a group as they are on the chip and chip equips, the charts are, more times than not, an investor's most reliable guide. |
