A few other points/comments neglected to mention before:
1) share price has been sluggish I think because of reduced earnings. But an interesting point to consider is
that R & D spending has greatly increased, to support
all the new product intros according to Mr. Sullivan.
I made the observation to him that without such increases
their (short term) earnings picture would not have deteriorated. I like a strong commitment to R & D, this ensures survival more than
anything else provided the program is well managed and efficient.
2) Perry had asked about insider share purchases/sales. I am
checking various sites and documents, but one observation would
be that compared to the larger companies in this field, SMTL
is quite closely held (Stocksmart's site indicated that as of 31 Dec
95 48.91% of the shares are held by Thompson Raymon Ladeine,
which presumably is Ray Thompson's investment vehicle). So he
is the key honcho and already maintains an unequivocal stake
in the co. Conversely, succession becomes an important question. It is a good point to check incentive programs including
share purchase for others and how it is exercized. I haven't read
SMTL's 10k fully yet from SEC, I think it was issued in Aug. Homework!
Anyhow total common shares outstanding are reported 13.7 million as of Sept 30th. This to me means good upside potential in this stock once Semitool can report better earnings (simple supply-demand) and
is better known in the investment community. Interesting it
held up last couple of trading days while the major players
gave up some of gains.
3) I think a broader long term question also needs to be followed, relevant for all equip makers. A guy from Infrastructure commented on other thread that U.S. makers are "behind the curve" and Japanese suppliers are pulling ahead. I dont know what sectors in particular. SMTL's main Japanese competitor is Dainippon Screen, a much larger co with some 21% market share in wet processing field from what I understand from Mr. Sullivan. So, is SMTL really gaining ground in various niches or not? Mr. S mentioned distinctive
features such as device side down in case of solvent based tools which allow better plating, spray rather than immersion. At least
judging from increased sales in new products, their introductions
so far are well-received, though Mr.S does not expect growth at
the same torrid pace as last 2 yrs. I would be surprised too. |
