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Technology Stocks : Semi Equipment Analysis
SOXX 306.14+0.4%Dec 24 4:00 PM EST
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To: Gottfried who wrote (52368)6/11/2011 1:07:13 PM
From: Donald Wennerstrom3 Recommendations  Read Replies (3) of 95632
 
I think the price targets are useful, but just like any other "tool" they have their limits.

You are right, both AMAT and WFR did exceed their price targets earlier this year, but I have always thought of price targets more for the 12 months going forward than what might have occurred in the recent past.

I put together a table that shows the price target information at 3 different points in time compared to the actual price. The first point is 2/18 when the SOX was essentially at an interim high of 470. At this point the individual stocks were right near their 12 month price targets with many of them exceeding their targets. Out of the 21 SOXM stocks, 14 were above their targets. Then as we move forward to 3/4 comparisons, the SOX was at 460 and only 9 stocks exceeded their target prices. Both AMAT and WFR had exceeded their targets on 2/18, but were now below their targets on 3/4.

Then we can move on to today. The SOX is at 403 and their are no SOXM stocks that exceed their target prices except NSM which doesn't count due to being in the process of acquisition by TXN. Looking at each individual stock at the 3 points in time, price targets have changed. Some a great deal and some very little. AMAT went up and then went down. WFR continued to go up slightly, but price continued to go down. Look at CREE - a cut of almost $20 a share from Mar to present. At this moment in time, the actual prices are much lower than the target prices for the SOXM stocks. The question is - do the actual prices recover to the target prices or do the target prices get reduced to the actual prices. As usual, we have to wait and see.

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