Hi RtS,
You can count me in, too.
"Valuation" as bandied about on CNBC and in the general financial press is a virtually useless concept. (In fact, I would put it down there with "diversification" as another piece of investing "misdirection" for the masses, but that is a different story.)
Let's look at it this way: The quality semi-equips and leading niche players in the sector offer the only game in town for a reliable revenue stream in the future. The only questions for the investor are: how much will you pay today for that revenue stream in the future; and what else might you do with your money, ie opportunity cost, while you wait.
With real interest rates at or near historic lows, the latter question takes care of itself. Likewise, the changes in accounting standards and revenue recognition issues are just so much noise -- the money is there in the pipeline and the only question is when to put it down on paper as "revenue." Frankly, slower revenue recognition and the temporary high "valuations" they appear to mean for our sector has given us a nice window in which to accumulate shares for the next run-up.
I agree with Cary, I think these non-issues may well produce a pull-back as the CNBC talking heads warn that semi-equips are now "pricey on a valuation basis," whatever that means. Does that change the scope or value of the coming revenue stream? Clearly not.
While I am already heavily invested in a basket of 10 semi-equips and compound-semis (for the record, KLIC is my top holding, followed by ATMI), I will add more on any real weakness.
Best rgds,
Jonathan |
