Cohu, Inc. (COHU) Message Board

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Technology Stocks : Cohu, Inc. (COHU)

COHU 23.14

+1.4%

11:31 AM EST

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To: Henry D who wrote (1274)	5/12/1999 1:00:00 PM
From: Mr. Sunshine	Read Replies (2) of 7827

Henry - My take on the meeting is positive. Schwan said that COHU would rise and fall with the semiconductor business. Growth will come from improvements in the overall business rather than taking market share from others. A rising tide lifts all boats, as they say. Pretty simple, really! I believe that the long term prospects for the semiconductor market are excellent. Schwan said that margins would improve, but probably not get back to the 26% range. I would expect them to get to the 15% range. I like the introduction of new products and high levels of R & D, even if they hurt earnings in the short term. I follow Michael Murphy's philosophy that R & D is an investment in the companies future rather than an expense. He adds R & D back into earnings to get what he calls "growth flow". (Ironically, I do not believe he is a great stock picker, but I do like his methodology.) I am not sure that I believe Schwan's comment that cash levels would decrease. The company is making so much money and has no debt, so I expect that rising business will more than pay for the increase in receivables and capital improvements. I am neutral on stock splits. It is just cutting up the pie into more pieces. You still do not have more pie. <<Personally I was hoping for more good news.>> Were you hoping that they were going to announce a name change to COHU.COM? :-) Seriously, I felt the "tone" of this meeting was better than last years, and the news was about as good as could be expected from this conservative company. My only mild disappointment was that they do not have any acquisition plans. Seems like this would be a good time, if they could pick up a good fit at the right price. Best regards, Steve

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