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Technology Stocks : Semi Equipment Analysis

SOXX 330.35

+0.5%

4:00 PM EST

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To: Kirk © who wrote (27031)	11/20/2005 12:17:15 PM
From: Donald Wennerstrom	Read Replies (1) of 95707

Kirk, The chart you show with dates for the columns of 10/4/02 and 10/25/05 cover the 3 week period that included the "long term bottom" of 10/9/02. <<If I go back and look at the best times to buy LRCX, I believe it was when PEG was high.>> The PEG was relatively high for all stocks(assuming they had positive "next year" earnings to even allow computation of a number) since the earnings outlook for "next year" was so low. Notice the bottom number of "next year" earnings was at a measly 2.91. Eight of the stocks had negative "next year" earnings. Like many stocks, LRCX had low earnings expectations at that point, and had a high PEG number. As you point out however, LRCX over the past 3 years has been able to execute a "recovery" and now has shown one of the best earnings growth stories in the Group. They have consistently beat anaylst estimates, many times by a very wide margin. LRCX has continued their "winning ways" with a good quarterly report in early October. They were one of the few companies that projected a positive outlook for the next quarter and next year. This immediately caused the stock price to "take off". The day of the report the stock was in the 30 dollar region, now it is in the 38 region, a nice 25+ percent gain. As you point out, LRCX performed and UTEK did not.

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