Semi Equipment Analysis Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Semi Equipment Analysis

SOXX 306.04

0.0%

Dec 26 4:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Alastair McIntosh who wrote (6872)	11/14/2002 7:38:37 AM
From: robert b furman	Read Replies (1) of 95640

Hi Al, It is not an uncommon activity to roll a favorable tax treatment into earnings at the end of the fiscal year. Often times these last quarter adjustments are taken after a consultation with the IRS. As the previous years taxes are estimated and accrued over the year - an overpayment is more the sign of a careful,conservative management. Although I agree with the concept that this is a move that indicates business is soft - it also is a sign that management is doing a more than credible job of surviving during the tough times. These are tough times and management has been down this raod before. There is no doubt that good times will resurface. When IBD features a lead story on page one that the IC industry has matured where the go-go days of 20% growth plus are gone and the industry is settling in to believe that 8-10% growth is the best one can expect - that is the best sign there is that a turn is close at hand. The "fact" that there is no return to the growth days is what I've been looking for as a final signal that this bear is short in life. Every one must know it will never recover - before a recovery can in fact occur. With Walmart same store sales growing at 3.5% - the acceptance of a long term growth rate @ 8- 10% is just dandy. But no one will get excited until that 8-10% growth rate is at peak cycle and at a pe that Wally gets(or higher). By then, our favorite threads will be cluttered with bulls looking for the moon. These are times where quiet accumualtion of industry leaders are the smart move. Get as many as you can, while they're cheap.When IT spending is on the mend and growth as low as 8-10 % is occurring( my bet is it will be much higher then ) - you'll be kicking your back side for not buying at an obvious low trough. Don't get me wrong 11 is better than 14 - but a year from now, no one will be concerned if they missed the perfect price by 2-3 points. Now as in 98 - the excellent companies are downsizing for lean running, as that is what will occur next year. The surprise of the year will be how profitable these lean running companies will be on any signs of an uptick. Additionally: note how fast stockholder equity grows when receivables and inventories are minimized, and depreciation flows positive with out incurring tax liabilities. Remember depreciation is a cashless expense.In the SCE sector - depreciation is uniquely accelerated - thusly cash flow is tremendous. This allows for upgrades and replacements before an overall turn in the topline growth of the sector is apparent. This is a key characteristic of this sector.The life cycles are so short for many of the products made that full depreciation of the purchased equipment is difficult to achieve.Being able to write all of the machine off - is often only achieved by those who jump out early and seem to be investing during the trough - Intc is the classic example. For many cycles and almost 2 decades the turns of this sector's stock prices have not been led by fundamentals. It has been anticipated almost intuitively. Bob Funny Morgan just said the same thing on CNBC - Ahh great minds.gggg He said the sector still has long term growth in mid teens. When that is accepted by all gurus out there, Amat will be trading in the 30's plus. BWDIK Bob P.S. Very long this sector and patient.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next