Chip gear makers swim against the tide
April 03, 2001 02:21 PM ET
by Robert Wang
NEW YORK -- As today's high-tech sell-off pushed the Nasdaq below 1,700, three major chip equipment companies were bucking the trend.
At 2:00 p.m. ET, shares in Upside.com 150 components Applied Materials (AMAT) were up nearly 2 percent; those in KLA Tencor (KLAC) were up about 4 percent.
Of all the other companies on the Upside.com 150, only Micron Technology (MU) was up in mid-afternoon trading.
Bound to rebound
The stocks are doing well today because the highly cyclical chip equipment sector will inevitably recover, according to Mark FitzGerald, an analyst for Banc of America Securities.
"The best buying opportunity is when the news flow is the worst," FitzGerald said.
"You sell the group when things look the best and you buy the group when things look the worst," he added. "Coming out of a downturn, these stocks typically double and triple. The downside risk is minimal and the upside opportunity is significant."
Also, when the IT sectors that buy chips recover, chip-gear makers will recover as well, he said.
FitzGerald has "buy" ratings on Applied Materials and KLA Tencor.
Afternoon indices
At 2:03 p.m ET, the Nasdaq was down 91.85, or 5.15 percent, to 1,691.12.
The Philadelphia Semiconductor index had dropped 4.32, or 0.86 percent, to 498.85.
At 1:46 p.m ET, the Upside.com 150 Computing Components Subgroup index was down 25.69, or 2.71 percent, to 920.99. |
