re: What to do with the money until Jan 1999, though?
Short (or buy puts) on amat,mu,usw,amzn.
Short anything with a PE>30 and EPS growth<10%.
Go long on intc,txn (better two months ago, but not too late).
I'm not so sure about cymi as a leading indicator. My impression is that the mutual fund managers buy and sell the entire sector, without regard to the qualities of individual companies. I suspect a lot of them don't know the difference between what KLIC and CYMI sell. When the sector is hot, they buy. When the sector is cold, they sell. KLIC was a leading indicator of the late 1997 downturn. In 1996, all the semi-equips troughed together, like a school of fish turning in unison to some unseen signal.
micron's asp, and intc's inventory, is probably a better leading indicator of CYMI stock price.
In CYMI's earnings statement and CC, I could not find a single positive statement about the next 18 months (from today through 1999). Backlog down. Unit sales expected to be down. Flat revenues next quarter (it's reaching to call that positive, remember, this is supposed to be a growth stock). No semi recovery expected (through 1999). No visibility.
Beyond 1999, the indefinite future is wondrously bright. And today ain't too bad. But the next 18 months look ugly.
The fact that they are able to make a profit (given industry conditions), and that sales did not decline this quarter, will probably be enough to keep the stock (slightly) above 15.
You've been smart to watch and wait and be very patient. Keep on doing it. You'll still be able to buy CYMI below 20 next year. |
