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Technology Stocks : Semi Equipment Analysis
SOXX 306.14+0.4%4:00 PM EST
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To: Donald Wennerstrom who wrote (238)1/10/2001 12:12:54 AM
From: scott_jiminez  Read Replies (2) of 95631
 
Donald - you refer to the SEM/NAZ divergence. There's another 'divergence' of sorts that puts into question our common parameters of evaluation. Recall last year our discussions of Klic's bizarre valuations - great earnings, great earnings expectations and consistently one of the lowest PEs and PEGs in the sector. And the stock just kept going lower and lower. It made no sense whatsoever.

Now Klic has one of the gloomiest earnings forecasts: its Zack's rating has fallen from 1.5 to 2.8 (10 of the 13 analysts who follow the stock rate it a hold), its has the worst PEG in the sector and one of the highest next year PEs. And the stock keeps going higher and higher (Klic is 5th in your group since Dec. 1st - post 239).

One possible explanation is that all the bad news is already out for KLIC while others like NVLS, AMAT, LRCX, ASYT, KLAC continue to receive downgrades (by Tucker Anthony, Van Kasper, A. G. Edwards in the last ~10 days). The other fascinating possibility is that Mr. Market really did see the downturn coming in June and thus gave Klic - perhaps the most sensitive stock in the sector to cyclical turns - a forward valuation commensurate with severely retracting sales.

And now Mr. Market is starting to say, yeah, we'll be out of this in about 6 months so it's time to ring the bellwether’s chimes. Oh yeah, were not going to have a recession either.
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