Cohu, Inc. (COHU) Message Board

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Technology Stocks : Cohu, Inc. (COHU)

COHU 24.32

+1.2%

Nov 28 9:30 AM EST

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To: Nutty Buddy who wrote (2857)	4/25/2002 7:45:42 AM
From: robert b furman	Read Replies (1) of 7827

Hi NB, Well the real question is how strong is the ownership of Cohu. If investors were told "next quarter backlog and orders are growing so well that we expect to breakeven or better" six months ago -we would have had a price spike like a .com IPO in the go go days of 00.gg With a 589,000 loss and depreciation over 1,000,000 - this is maintenance production levels with backlogs growing. If the R&D expenditures are resulting in new testhandlers that will gain market share with the new technology manufacturers,then CAPEX is not needed to make money.Capex is needed to make record money. Like G's charts show bookings have two cycles: The first out of the trough is a cycle created by the technology leaders.As new methods of manufacturing are required for state of the art chips - higher margins are the result (fewer competitors). The next cycle - is when the laggards say "hey I want those margins too" or they are forced to adopt the new technology (which provides efficiencies of manufacturing)in an effort to maintain margins on a declining product price. Cohu's management made it very clear that they don't see a broad list of cutomers buying equipment - they're selling to the leaders : INTC, TXN, MOT,TSMC. We are in the first cycle - note the stocks "high" price has suffered a slight set back in price as the second cycle begins to transition. As price bottoms in that transition - it is perhaps the last safe accumulation - but it offers the quickest upward response. I can be patient here. Management said they didn't see a boom looming out there for the next 1-2 quarters.I bet Q3 comes in dandy and Q2 gets in the black. In between they'll be watching receivables and inventory.As a matter of fact in the past ,as they see business getting better - they'll ramp up inventory awaiting the sales pick up. Now is a time to get margins in line and wait for cycle 2 to build. This company is a niche leader - with some new products that may well open new opportunities - oh yea and 94 million in cash - I like that a lot.We surely have staying power and positive cash flow. We may suffer some price decay here but this stock has a very bright future in what is widely becoming a rebounding sector. Once again semi are leading - Not too long ago they were being called DOA. Long term charts say it all.Another cycle begins - to the dismay of all the doomsayers.gg Hold with confidence - I'm thinking. Look to add to if the panic of the weak holders gets ridiculous ( 21 -23) and smile like a big dog if Cohu jolds its gains well (25-27). P.S. short interest in Cohu declined in the recent month- just published in today's IBD - 250,000 vs 331,000 last month - suppose they know something?? gg Bob

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