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Technology Stocks : Semi Equipment Analysis

SOXX 330.83

+0.1%

Feb 5 4:00 PM EST

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To: Donald Wennerstrom who wrote (128)	11/13/2000 7:24:37 AM
From: scott_jiminez	Read Replies (1) of 95880

Don - part of the anomaly of Klic's FY2001 estimate number may be the huge discrepancy between various estimates. According to First Call, the mean and median estimate is $1.03 but the range is from $0.05 to $2.57. The standard deviation for the estimate is a huge - 0.70 (compared to an SD of 0.07 for the FY2000 estimate of $1.89). These numbers suggest that there may be two prognostication camps for Klic's business nest year...and perhaps is revealing for the sector as a whole: one group believes we will see a typical protracted slowdown, as is common during the trough of previous cycle downturns, while another sees us in a temporary pause in a protracted upturn. I would guess the average estimate for Klic FY2001 earnings for the former group is ~$0.25-$0.50 while for the latter is $1.75-$2.25. We should begin to get a clearer picture of 2001 over the next couple of weeks. If the cycle downturn group appears to be correct, the stocks will remain dead in the water for 6+ months; if the 'temporary pause' group appears to be more accurate, these stocks are red light specials right now. BTW, S&P provides two ratings for stocks, a 'star' ranking and an 'outlook' measure. On a scale of 1 to 5, Klic has 2 'stars' (an 'avoid' rating). On a similar scale, Klic has a 5 'outlook' rating (highest). Go figure...but completely consistent with the bipolar perspectives outlined above. Looks like a very ugly opening this morning.

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