Sold all my KLIC at the close at $6.63. I bought in August, at $6.78, and then doubled up at $5.67, so it was nicely profitable (and a wild ride in between, as always with KLIC).
I bought at $6.78 because I thought the 200dma would be support. That line promptly failed. Now, it looks like the 200dma is resistance. The SOX almost took out its April high today, but KLIC is 31% below its April high.
KLIC has often signaled a downturn for the sector. It's chart now shows all the signs of being past the cycle peak:
1. hasn't set a new high in 7 months
2. 200dma flattening out
3. stock goes far below 200dma, then fails repeatedly to get back above that line
4. 50dma crossing below the 200dma
In addition, it warned recently, after a string of blow-out quarterly reports: revenue next quarter will be only $130M, about half last quarter's revenue. They are reducing headcount, which they wouldn't do, unless they thought the downturn was real.
Just like AMAT, their current results show cycle peak numbers:
763M$ rev FY2010, compared to 424M$ in 2004, and 899M$ in 2000
$1.92 EPS GAAP FY2010, compared to $1.10 in 2004, and $1.93 in 2000
44% gross margins for FY2010
83M$ net cash (= cash - LT debt), it's best since 2000
phx.corporate-ir.net
seekingalpha.com
CC notes:
As gold price continues to significantly rise, the drive to transition additional devices to copper will likely accelerate...
In response to the expected shipment decline for the December quarter (1FQ11), we have already scaled down our capacity with headcount reductions in our bonders manufacturing operations...
...a strong pattern of ordering, basically up to the end of August, (then) it started to slow down in September, and what we have really experienced is a number of push outs...
Q: Bruno, if you look at a typical cycle, usually when the OSAT customers pull the plug, it is just a matter of time before your IBM customers and the Memory guys go away too. Do you think there will be anything different this cycle?
A: I think it is too early to tell. As you know, we are the first one to proceed. Whenever the markets react, whether it is up or down, we are typically the first one to see it and the OSAT’s are also the first ones to see that as their customers stop adding value to their products...
disclosure: now out of all semis and semi-equips except AMAT. I hope I'm wrong, as I'd like to get out of AMAT at higher prices ($14-16). It's so low, I'll just hold AMAT through the next down-cycle, if that's where we're going in 2011. I am considering shorting KLIC, as I expect it to warn again. For now, I'll wait to see if it's going to stall here, at the 200dma. |
