Joe,
As usual, you have pointed us to some good articles on market
performance. The doom and gloom mind-set in the semi-equips has
really gone to extreme. As you conclude in your post, better times
are ahead for undervalued small cap stocks - the valuations are just
too compelling here.
To show just how bad the situation is, I am posting the table below.
I have presented the basic table before, but this time I am sorting
on the comparison between Thursday's closing price and the high made
by each stock in 1995.
First, some comments about the results of the comparison. Adding up
the columns gives a sum of 1148 for the group in 1995 and 598 for the
same group last Thursday (for purposes of this comparison, the last
three stocks in the table are not used - they were not listed in
1995). The entry at the bottom of the fourth column shows this
difference to be -48 percent. When the recovery comes, the group
will have to gain 92 percent just to equal the group high set in
1995.
The situation is even worse comparing Thursday's close with the highs
set in 1997. At the bottom of the table, the difference is -60
percent. This will require a group gain of 148 percent to get back
to the 1997 level.
While I believe the group is getting close to the bottom, this may
not be the case. It may just be my wishful thinking. We recently
had 8 down weeks in a row, followed by one up week of 6 percent and
then last week with a loss of 2 percent. I will "guess" that this
"bouncing" along of the group performance will continue for quite a
few months yet. Whether or not the "bias" will be to the upside or
downside remains to be seen. I have stated before that the next
runup may not occur until 1999 - the more I see of the negativism out
there, the more I am beginning to believe that scenario. The pre-
announcements and announcements of bad sales and earnings news is
certainly not over yet, and may continue for quite awhile.
Getting back to the table again, only the top 3 stocks in the table
closed on Thursday above their 1995 high. The first 2 in the table,
ETEC and ASMLF, began their history (listing) in 1995 and therefore
occupy a rather special category. In other words, part of their
place in the table is due to special circumstances compared to the
other stocks in the table. PLAB occupies a special place in the group
of 41 stocks. It is one of the few stocks that can be placed in the
category of a "buy and hold" stock out of the group. It has a long
history of showing an ever upward performance. It has had some
setbacks along the way since the early 1990s, but overall it has had
a very nice upward trend. Even though a few other semi-equips (very
few indeed) can be placed in this category, I believe PLAB is number
one out of the group and the rest come in a poor second.
As stated above, the group performance compared to 1995 is down 48
percent. Only 16 stocks bettered that performance and the remaining
25 stocks had worse performance. Their are some very good names in
the lower part of the table. Let's take FSII as an example. This
was my first investment in the semi-equip area a little over 2 years
ago at $13. Thursday it closed at $9.44 so I am down 27 percent to
date. To date, all I can say is "buy and hold" sucks.:)
Two other stocks I hold are SFLX and AFLX. SFLX I bought at $9.
Thursday it closed at $7 so I am down 22 percent. I thought I was
being real clever about 3 weeks ago when I bought AFLX for $16. I was
convinced it was at the bottom, or very nearly so. Thursday it closed
at 9.13 so I am down 43 percent - it only has to gain 75 percent to
get back to my entry price. Let's look at overall performance,
however from 1995 for each stock. SFLX is down 63 percent and AFLX
is down 71 percent. Just to get back to their 1995 highs - 3 years
ago - the gains have to be 168 percent and 241 percent respectively.
If they ever manage to do that, most everyone would probably be
pretty happy. Both of these stocks, while coming close to their 1995
high in 1997, could not quite make it.
There are 11 stocks at the end of the table that are down over 70
percent from their 1995 highs - that's over 25 percent of the group.
MTSN, the last entry in the table, is down 83 percent - it has to
gain 472 percent to get back to its 1995 level.
As shown in an earlier post, the PBR for the group is 1.97 at
Thursday's close. This is compared to the DOW and S&P 500 which is
up around 6 or so. Even though the reading is 1.97, it could go
lower - how about to around 1.0? I mean, since the situation is
ridiculous, how about going all the way?:)
1995 1997 07/02/98 98 vs 95
HIGHEST HIGHEST CLOSE PERCENT
SYMBOL COMPANY PRICE PRICE PRICE CHANGE
ETEC Etec System 9.17 67.13 34.75 279
ASMLF ASM Lithography Holdings 14.00 52.88 29.50 111
PLAB Photronics 20.24 31.38 24.25 20
AMAT Applied Materials 29.56 54.00 29.69 0
SFAM SpeedFAM 18.25 60.38 17.38 -5
ATMI ATMI Inc 15.44 41.75 13.50 -13
NANO Nanometrics 10.13 13.63 8.75 -14
MASK Align-Rite International 18.00 24.00 14.63 -19
NVLS Novellus Systems 43.19 64.69 34.50 -20
VECO Veeco Instruments 29.13 72.50 23.25 -20
PRIA Pri Automation 22.38 58.50 16.56 -26
COHU Cohu 35.75 56.00 24.25 -32
TER Teradyne 42.00 58.75 27.38 -35
MICN Micrion 16.00 27.50 9.88 -38
HELX Helix Technology 27.00 32.19 15.00 -44
KLAC KLA Instruments 46.91 75.63 26.00 -45
CMOS Credence Systems 40.25 54.13 20.69 -49
WJ Watkins Johnson 56.25 37.25 28.81 -49
BRKS Brooks Automation 24.00 39.69 12.06 -50
IMSC Integrated Measurement Systems 16.50 20.00 8.00 -52
ASYT Asyst Technologies 26.50 47.25 12.75 -52
UTEK Ultratech Stepper 46.75 34.38 19.38 -59
SFLX Smartflex Systems 18.75 17.50 7.00 -63
KLIC Kulicke & Soffa Industries 44.38 57.25 16.56 -63
LTXX LTX 14.00 8.19 4.81 -66
SVGI Silicon Valley Group 48.38 37.75 16.06 -67
EGLS Electroglas 39.75 35.25 12.63 -68
AFLX Adflex Solutions 31.13 28.50 9.13 -71
WFR MEMC Electronic Materials 38.25 38.75 10.56 -72
GSNX Gasonics 26.83 23.06 7.31 -73
TGAL Tegal 13.88 11.25 3.75 -73
PHTN Photon Dynamics 12.00 8.38 3.19 -73
LRCX Lam Research 71.75 66.31 18.06 -75
FSII FSI International 37.75 23.19 9.44 -75
SMTL Semitool 36.00 26.88 8.34 -77
IPEC Integrated Process Equipment 54.50 37.19 11.06 -80
ASEC Aseco 21.88 18.88 4.19 -81
MTSN Mattson Technology 31.13 16.00 5.44 -83
CYMI Cymer 48.75 15.63
DPMI Dupont Photomasks 72.00 34.25
CFMT CFM Technologies 40.50 13.28
TOTALS 1148 1478 598 -48
98 vs 97 1639 662 -60 |
