At CYMI's current price, you are looking at 15x conservative earnings estimates. At this price the market is predicting a pretty significant slowdown for CYMI, which just isn't going to happen. After having taken such a big hit, simply verifying that the sky isn't falling should lift the stock. Though there are concerns about the Korean market, CYMI is in a much better position than other semi and semi-equip companies that may face concerns about getting paid. CYMI, by virtue of dealing with stronger companies shouldn't have collectibles problems. Moreover, DUV equipment will be a priority purchase by semi companies, whether they are going through hard times or not.
Right now, CYMI is vulnerable to tax loss selling, but once that dries up there isn't much motive to sell left in the share price. At the same time, the likelihood for bargain-hunting is strong. I think we should have a strong participation in a year-end/January rally. People selling here won't be able to get back in at these prices and will have to forego owning CYMI or chase the stock.
The key fundamental for CYMI is that smaller geometries are a necessary part of the competitive landscape for semi companies. That will bring considerable business CYMI's way regardless of the Asian problems, falling prices, etc.
Baird |
