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Technology Stocks : Semi Equipment Analysis
SOXX 296.92+0.1%4:00 PM EST
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To: Gottfried who wrote (5162)8/29/2002 11:42:34 AM
From: Terry D  Read Replies (1) of 95500
 
NVLS - stuck in a limited range acc. to Maire at BS

NVLS is holding its Q3 mid-quarter update after the close. In our view, we are not likely to come away with any major new incremental information from the call. Previous guidance was for orders to be flat to down 10%. We could potentially see NVLS fall more in line with Applied Materials, and update to down 5-15% in orders, or perhaps even lower. Our view is this potential is already discounted in the stock price. Our perception is that business has continued to weaken since NVLS' quarterly report. Most recent indications from Asia are for capital spending to trend downward. Given that early indications of “back to school” do not appear exciting, we would suggest that any spending changes are likely to be negative from here. NVLS has exposure to the transition to copper, which does lean it more in favor of being a technology buy vs. a capacity buy, but copper is far from 100% of business, especially after the Gasonics (strip) acquisition. Thus NVLS has similar exposure as other same-sized equipment cos. Given the relatively low valuations of the semiconductor equipment group in general, and NVLS in particular, we feel that downside from here is relatively limited, but upside is also likewise limited due to the shadow that is hanging over the general economic and technology specific recoveries. We see little movement of the stock generated from the update call with the only potential movement being downside if any catastrophic projections are made (which we do not expect).
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