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Technology Stocks : Speedfam [SFAM] Lovers Unite !
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To: MULIFAT who wrote (2602)1/27/1998 5:06:00 PM
From: Mr. Sam  Read Replies (1) of 3736
 
<<Mr Sam, just wondering if you have retired......Have not seen your valuable comments for a while. Do you still like SFAM at these prices?>>

Sammy, I can't retire with SFAM at these levels! :-)

I haven't posted lately because the fundamentals haven't changed lately. I haven't bought or sold any SFAM since December 11, 1997, at $20 (as I posted at the time). SFAM represents 23% of my portfolio. With $11 in cash and a leading product in a fast-growth sector of the semiconductor equipment industry, Speedfam represents very good value at this time. The whims of the Street giveth and they taketh away. It's only a matter of time before Mr. Market rewards our patience, IMO.

I won't consider selling SFAM at a Price/Sales multiple of less than 3.0. We're at 1.88 now (if you do the calculation by adding trailing 12 month sales in dollars and then divide by shares outstanding at the end of the last quarter; adding sales per share for the 4 quarters yields a slightly different number). I think that we'll see a P/S ratio of 3.0 sometime during 1998. I'll re-evaluate the situation at that time.

BTW, I'd put the probablility of a SFAM merger between now and the end of 1998 at about 50%--pretty good odds. With all the cash SFAM has right now, they don't need to be in a hurry to get married, but I'll be surprised if they stay independent through the end of 1999. There's not much point in speculating about every possible permutation that such a deal might look like. Suffice it to say that it would be at a premium to the current market value, it would strengthen SFAM's field support and marketing, and such a deal might occur at any time.

Profitable investing,
Mr. Sam
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