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Technology Stocks : Semi Equipment Analysis

SOXX 299.81

+2.7%

Dec 19 4:00 PM EST

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To: Donald Wennerstrom who wrote (59987)	5/25/2013 9:53:41 AM
From: robert b furman	4 Recommendations Read Replies (2) of 95617

Hi Don, At the great fear of jinxing something , the recent price action has been pleasant. As you know Cohu has been dead money for 13 years over which I accumulated an undue concentration. Cohu has for years paid a small dividend which is a decent yield at the lows (8 ish to 9). My long term ownership of this stock now spans over 35 years - in and out completely several times. Over all the stock has been exceptionally good to me. My long term affection for the stock has always been due to their debt free balance sheet and a product that I've always felt would have continuous and increasing demand for - chip handlers utilized in the test process that ALL chips must go through. For a long time they were criticized for hording cash.At the end of 2008 they had cash of 155 million. In the first quarter of 2009 they bought another handler company from Dover - Rasco. In the first quarter this year they bought another handler company from Schweiter - Ismeca. They are still debt free and have 48 million in the bank. Cohu now has all of the types of handlers made globally,#1 in pick and place, # 2 in Gravity, and # 1 in turret. Both of these acquisitions had no overlap in product - thus providing many synergies with their now World's largest sales and service operation for handlers. If we ever get back to the sector growth of average years,I believe Cohu can easily double their 2012 revenue. James Donahue , the CEO, has patiently and at very opportune times deployed the cash reserves that have been built up over the decades. Full disclosure - I've been a cheerleader for this stock forever. I attend the stock holder meetings and inspect the facilities. I meet the management and I ask questions. I think this stock has recharged itself brilliantly. Rather than Amat going into solar or buying Vsea or Lam buying Novellus, Cohu has consolidated it core competancy. Last but not least, with the acquisition of Ismeca and their turret handlers they now also serve the fast growing LED lighting industry. LED growth is expected to grow at a CAGR of 28 % through 2015. A look at the chart of Cree suggests this a wonderful growth opportunity for this maker of complex handling and now finishing equipment. Buying Cohu is one of the most efficient ways of cashing in on LED's - IMO Cohu has had a nice run and by any standards it is overbought here. I await a dip and am truly excited to see the company revenue growth this year. Thanks for the chart!! Bob

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