The following is an assessment of Brooks from Briefing.com today.
Brooks Automation (BRKS) 40 5/16 +1 7/16: Unless you've been asleep at the wheel over the past couple of days, you know that the chip equipment group has been on fire... Rally was ignited when Applied Materials (AMAT) reported better than expected earnings after Tuesday's close, and the sector hasn't cooled off since... Traders beginning to view the slowdown in the chip/chip equipment sector as merely temporary (no more than a couple of quarters) in nature... With most of the stocks in the sector down sharply from their 52-wk highs, investors snapping up shares in anticipation of the second half CY01 turnaround... One stock in the group worth considering is Brooks Automation... BRKS is a leading global supplier of OEM tool automation and factory management software for the semiconductor, data storage and flat panel display manufacturing industries... Despite tough industry conditions the company managed strong growth in Q1... While it sees slower growth over the next one to two quarters, due to macroeconomic conditions, the company's anticipates the transition to 300mm wafer processing to accelerate as an underlying trend... BRKS is well positioned to exploit that trend... In fact, earlier this week the company announced that it had shipped its 2000th fab-ready 300mm Load Port FIXLOAD... The FIXLOAD uses Brooks Automation's patented Front Opening Unified Pod (FOUP) technology -- the standard for 300mm wafer production... Though revenues are expected to slow considerably from the record pace of FY2000, projected FY01 growth of 30% - considering the challenging environment - is very respectable... EPS for FY01 expected to climb to $1.89 and then to $2.22 in FY02, with a long-term growth rate of 22%... Given stock's better than market growth, Briefing.com contends that BRKS warrants a PEG (p/e to long-term growth rate) of at least 1.25... Targets an intermediate-term run to at least the 56 area... Technicals also turning bullish, as stock recently broke above its 150-day moving average and is now flirting with pivotal resistance at 40... A confirmed break of this ceiling (establishing what is often called a cup and handle formation) would target an intermediate- to long-term test of 60. -- Robert Walberg, Briefing.com |
