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Technology Stocks : Cymer (CYMI)
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To: david gilman reed who wrote (6723)10/27/1997 12:02:00 AM
From: PAinvestor  Read Replies (2) of 25960
 
Yep that's right. These numbers are lagging indicators around earnings season - as a rule. In fact, they are always lagging as they provide a snapshot of what the analyst was expecting when he/she put out their most recent report or update. Sometimes it will not be for months, remember analysts cover alot of companies and it can sometimes take days/weeks to update earnings estimates. So it is always a good idea to check them with other sources (I/B/E/S or Nelsons) and always take into account industry variables that sometimes change weekly.

As I write Hong Kong is down 6% as it has taken a large lurch down before lunch. Japan is down, as is Australia. I expect that we will soon begin to see some initial retail sales reports out of Asia that will be very, very ugly (including Japan). One of the most lucrative consumer items in Asia is the humble PC. I expect sales will fall through the floor. I expect GDP growth rates to be revised downwards by the major brokerage houses for the Asian region fairly soon. DRAM prices are $4 for 16meg currently and still falling. It really is looking quite bad for semiconductor capex, though I am still long Cymer. Why? I think the market will soon place a premium on a company where there is visible earnings growth which has been stated so eloquently by management. Gross profit margins to increase? Sequential earnings growth? High market share? MMmmmmm sounds good to me

In an environment where overall capex will be called into question, that capex will have to become more selective. To me, that means aggresively moving to IC's that require .25 photolithography processes and below. Cymer should ride out the storm ahead for the other Semi equipment makers. Little concerned with my AMAT holding though........

PAinvestor
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