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Politics : Formerly About Applied Materials
AMAT 223.95+1.7%Nov 21 3:59 PM EST
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To: Jacob Snyder who wrote (25161)10/10/1998 10:57:00 AM
From: KLINVESTOR  Read Replies (1) of 70976
 
Jacob,

<<One of the expensive lessons I've learned is always buy the best. You pay for quality, and in the end, it is almost always worth it.>> I agree with this statement in general and would always buy Coke instead of Pepsi because Coke's dominant position will continue to derive superior returns. But in the semi-equip sector the comparisons are not as easy. AMAT is clearly the biggest player by far but they do not compete in many equipment lines and have nothing in the test or test handling area. The same is true of other niches in the equipment sector so my point is that there are companies that dominate their respective niche but are much smaller in revenue and potentially have less competition than AMAT does and higher margins than AMAT has. These companies still have significant growth opportunities in the next industry rebound (as does AMAT) and are also potential acquisition targets in the future for larger companies like AMAT wanting to move into that particular sector.

Teradyne is a good company and on a smaller level Cohu has the strongest position in test handling equipment by far and extremely good margins and finances. Neither competes with AMAT yet and both trade at significantly lower multiples.

I very much agree with your comments on MU and INTC. It is as if no one wants to hear good news these days. If you go back a year ago and listened to the posts when this slide began no one wanted to listen to bad news. Unfortunately I did not listen to the bad news on the horizon at that point but I do think there are some positive signs out there. Only time will tell.

Good luck!
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