KLIC 2009 stock price range: $6.00-$3.00
2000 hi stock price/2000 EPS = $43/$1.93 = 22.3 cycle peak PE
12-03 hi stock price/2004 EPS = 17.20/0.89 = 19.3
2-06 hi stock price/2006 EPS = 12.50/0.78 = 16.0
7-07 hi stock price/2007 EPS = 12.46/0.57 = 21.9
The EPS is for fiscal years, which end in September.
Those 4 numbers, for cycle peak PE, seem to form a cluster. Their average is 19.9. So......
Today, the FY2009 EPS consensus estimate is $0.30. Multiply that by a PE of 20, and I calculate a stock price of $6.00.
There are several caveats here:
1. if 2010, not 2009, is the cycle peak, then the stock won't peak till October 2009 at the earliest. Notice that, in all 4 examples above, the stock price peaked during (not before) the fiscal year the earnings peaked.
2. 2009 earnings estimates for KLIC have been getting slashed recently. It was $0.60 3 months ago.
3. The estimates for 2009, range from -0.11 to +0.63, among the 5 analysts. The standard deviation is 0.27, which means nobody knows.
To reassure myself that the stock probably wouldn't go to $1.91, as it did in 2002, I reviewed the 10K filings going back to 1998. In the FY ending Sept2002, the company lost $5.57/share. From 2000 to 2002, cash went down from $317m to $111m, while long-term debt went from zero in 1999 to $300m in 2002. Management seems to have learned something from that traumatic experience. I'm fairly certain they won't repeat their 2002 performance.
In spite of the last few days, the volatility of all the semi-equips has been declining, ever since the 2000 peak. AMAT, for instance, seems to be flat-lining at $17, with steadily lower peaks and higher troughs.
I guess $3 for the low, because it's half the $6 high price guess, and KLIC is usually about that volatile.
If others want to post their guesses, I'll collect and post them, and we can review the results at the end of 2009.
We could also do this exercise for the SOX.
Disclosure: In the last few days, I have started using KLIC as a medium-term trading vehicle, and have accumulated a position at an average cost of $4.70. I'm posting my trades in real-time at Subject 52720. |
