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 164.06

+3.0%

11:42 AM EST

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To: Q. who wrote (7321)	11/13/1998 7:15:00 PM
From: JBonline	Read Replies (2) of 10921

John G., To partly answer your guestion, construct a weekly chart starting at late Sept 1997 (marks price highs for semiequips) to contrast UTEK's price path with those for companies from the bottom of your list (with the fewest days to cover). This week this graph was given by: techstocks.com Utek simply did not decline as much in price since the Oct. 97 start of the sector-wide price decline. (If I remember correctly, the timing of the decline coincided with a massive closing of margin accounts by some of the brokers right before or coincident with their announcing sector-wide downgrades for semi-equips. Maybe margin accounts were less likely to hold UTEK??). Regarding days to cover, I believe UTEK has stayed in the low teens for months now (maybe a year??) without much change, which MIGHT mean pretty much the same people have stayed short the whole while. Shorts waiting for UTEK's price to go as low as shown in the chart for some other semiequip companies undoubtedly werre disappointed-- how many are still short because they never had the opportunity to cover at much of a profit? Finally, I use correlation analysis to track price paths and to relate their over-time patterns to momentum and fundamental indicators across about 40 companies in the semi-equip sector. Prior to October 1997, there was a tendency for prices to go UP on momentum and market cap; after that, a tendency to go DOWN on current and forward-looking fundamentals. In addition to those patterns, predictability of price paths seems poorer (lower R-squared) for companies covered by fewer analysts than for those covered by many. UTEK has only about 3 analysts covering it while AMAT, NVLS, LRCX and so forth have many more. I remember reading somewhere that a lot of the last year's shorting was done by brokerages and investment-banker types. The shorts may have guessed wrong about UTEK's likely price path due to a dearth of info. Julia Brown

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