I just wanted to make some comments/points about CYMI and tomorrow in general.
First, CYMI is one great growth corporation. Sales over the last 8 quarters have risen from $4.7MM to $50.1MM. There has been sequential (not year over year) sales growth in the last 5 consecutive quarters, each being higher than the previous one. In the most recent quarter, Cymer sales jumped 35% over the previous quarter. And Cymer excimer laser sales have almost doubled in the last 6 months--as sales are up from $27.6MM to $50.1 MM in the latest reported quarter.
The stock IPO'd a year ago (September 19 '96 to be exact) around $7. It rose nicely to a high of $28 on January 23, 1997, where it then found its first upside resistance. The stock then retraced to a low of $14 7/8 on March 17, 1997. The stock then made another upside run, hitting a high of $30 on May 27, 1997. This rally was met with sellers once again. However, it was on July 10 that CYMI began it's impressive upside run, into EPS that were released on July 24.
On July 24, 1997 Cymer announced earnings and on July 25th, the stock closed at $40. CYMI then went on to hit a 52-week high of $49 1/4 on August 25, 1997.
Some comments from Akins last Q from the press release (July 24 97):
The company's president, Robert Akins stated: "We believe that we have essentially satisfied our customers near term demand to fill
their production lines with lasers. Our continued growth rate will be a function of the speed at which our customers ship steppers and scanners to the chip makers as well as our ability to meet their
delivery schedules." The 12 month rolling backlog at June 30, 1997
totaled $122.8 million.
That backlog of $122.8 MM was up from the previous Quarters $91.4 MM. However, it was Akins' comments about CYMIs growth rate depending on the need of stepper manufactures and their speed of delivery that hurt CYMI shares. Rumors of all sorts surfaced--from silica shortage to laser failure to internal stepper problems at Nikon. And CYMI shares were subsequently punished and now sit some 44% depressed from their 52-week high. All comments have also been refuted and dismissed publically by Robert Akins and the employees of Cymer regarding any internal problems with Cymer lasers.
Throughout this crazy ride, Cymer's marketcap has fluctuated from about $200 Million dollars on the day it IPO'd, to $1.4 Billion--which was hit on August 25--not 60 days ago. Today, CYMIs market cap closed at $790 Million.
I think it is interesting to compare CYMI to another growth stock CTXS, which reported EPS a few days ago. CTXS, which makes software, has produced an impressive sales growth pattern over the last 4 Q's much like CYMI has. Sales in the past year at CTXS have moved from $15.7MM, to $21.6MM, to $24.5MM, to $34.9MM. Add those up and we see that CTXS has trailing sales of just under $100 Million. To demonstrate the general public's appetite for this kind of sales growth, CTXS was bid up $14 1/4 in trading Tuesday. Today CTXS closed at $75 and now has a market cap of $2.2 Billion, and the company barely has $100 MM in trailing sales and has no backlog.
I am looking for CYMI to show sequential revenue growth again, for the 6th consecutive quarter. At this level (valued at $790MM), Cymer and it's technology--given its track record--are undervalued in the marketplace.
I see little risk holding CYMI into EPS. Those long should understand the big picture and look back on CYMI's track record. I see excellent short term return on CYMI shares. $35 is an excellent target price to look for this week. At that level, CYMI would have a market cap of $1 Billion and given the company's backlog and growth rate, it seems doable.
Cheers!
Jeff Mills
|
