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Technology Stocks : Semi Equipment Analysis

SOXX 316.33

+1.3%

Dec 10 4:00 PM EST

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To: scott_jiminez who wrote (2383)	3/24/2002 11:11:27 AM
From: Ian@SI	Read Replies (1) of 95561

KLIC has a price/sales ratio of 1.9 (historically low). According to Baseline, every year since 1996 at least, KLIC has traded at a low PSR of 0.5 to 0.6. So far in 2002, the low PSR is 1.4. If history is an indicator, either KLIC's price will fall to about 1/3 of today's with Sales constant; or Sales will triple with price being held constant; or some combination of the 2. At this point, I suspect it's most reasonable to expect Sales to bounce up off the bottom somewhat, AND to see the price pull back. There's still no evidence that the backend orders are anything more than technology related. Front end unit volume growth is still looking somewhat anemic. It's unlikely that all existing front end capacity will be migrated to bleeding edge technology thus forcing a massive upgrade in the back end. All the same, you're not wrong. Just early. IMO, Ian

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