Brian Salerno of the Munder Net Fund:TER could surpass $100 in 6 -12 mos
September 9, 2000
Teradyne
To get The Internet Financial Connection Newsletter e-mailed to you for FREE, send a blank e-mail to ifc-subscribe@topica.com. In 1999, 185 stock ideas appeared in the IFC. As of July 3, 2000, the average return for each one of the 185 stocks was 56.32 percent.
Brian Salerno of the Munder Net Net Fund munder.com 800-468-6337, provides the following stock idea on Teradyne (TER 61 7/8). Below is the write-up.
The semiconductor industry is in the middle of a tug of war between the bulls and the bears. The bulls contend that the semiconductor cycle has further to go. The bears believe that semiconductors are well into their cycle and it won't be long before the industry starts to slow down.
Brian Salerno of the Munder Net Net Fund and the Munder Future Technology Fund is bullish on the overall outlook for the semiconductor industry. He points out that most semiconductor cycles have lasted about three years on average. The present semiconductor cycle is slightly less than two years old.
Salerno believes the present semiconductor cycle will last longer than the historical average this time around. "Unlike past cycles, this cycle has been marked by more rational supply additions and better inventory control than in the past," he says. "With all the improvements in information, lessons learned from the past, as well as technology improvements, I think all of those things will combine to have a smoother and longer upcurve in this cycle." Salerno adds that the semiconductor sector is experiencing a mid-cycle pause, which is typical in the cycle.
Salerno thinks its stock could surpass $100 within the next 6-12 months
One of his favorite semiconductor-related names is Teradyne (TER 61 7/8). The company is a leading vendor in the semiconductor testing market, otherwise known as backend equipment. Salerno mentions that Teradyne reported a "blowout" quarter in March for new product orders. In Teradyne's June quarter, it reported that new orders had declined sequentially, causing the company's stock to sell off. He says that prospects "look very good" for order growth to resume in the September and December quarters.
Salerno states, "Over the next 12 months, the number of new orders should begin to accelerate as new fabs are built in the industry and current fabs are outfitted with new equipment in order to expanded capacity. The company's outlook looks very positive. . . Their stock is significantly off of its high and is ready to move up again."
Teradyne is projected to earn $3.13 this year and $4.11 in 2000. Salerno thinks its stock could surpass $100 within the next 6-12 months.
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