Semi-Equips - Buy when BLOOD is running in the streets! Message Board

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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!

LRCX 222.84

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1:10 PM EST

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To: Mason Barge who wrote (5189)	4/20/1998 11:48:00 AM
From: HB	Read Replies (1) of 10921

I'm sure most threadsters know this, so this post is more for lurkers who haven't followed the group very long. The semi equips are sort of a hybrid of growth and cyclical. It's important to remember the cyclical aspect because you can get in real trouble analyzing them purely from a P/E/growth point of view, especially if you take future growth forecasts uncritically. (Anyone who followed Lam Research in late '95/early '96 knows what I mean!) The point is, sometimes it's most dangerous to hold the stock when it has a low P/E (and low PE:Growth ratio, if analysts are being slow in foreseeing a downturn as they were in late '95), and least dangerous when the P/E seems high. This is (sort of) characteristic of cyclicals. I grant you, though, that an AMAT has many of the characteristics of a "classic" growth stock, and lots of the smaller companies have potential to be emerging fast growers. I think the combination of this growth potential with sometimes-cyclical P/E behavior allows for extreme bargains at times in this sector... which is presumably why many of us are here! Cheers, HB

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