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Technology Stocks : Cohu, Inc. (COHU) -- Ignore unavailable to you. Want to Upgrade?

To: geoffrey Wren who wrote (1337)	7/21/1999 12:23:00 PM
From: Maurice S. Green	Read Replies (2) \| Respond to of 7827

There was a brief bit about the accidental passing of the Chairman of the Board Bill Ivans. Any confirmation or details available? Also was a dividend declared along with the 2nd Q report? Thanks.

To: geoffrey Wren who wrote (1337)	7/23/1999 9:37:00 AM
From: KLINVESTOR	Read Replies (1) \| Respond to of 7827

Geoffrey, I think Cohu/Ter make for an interesting and appropriate comparison. Your point about relative size of the companies is an important issue and may explain part of the reason there is such a discount for Cohu. You rightly said "in todays market" big is better. Interestingly that is not always the case but clearly larger cap stocks are being rewarded today although it was not that many years ago it was the reverse. If you are a value investor (which I consider myself to be) the relative size of the company should have little importance since a large or small cap stock can have a great balance sheet, a low PE, good growth prospects, and super management. So it is always an opportunity to buy what is so called out of fashion and small value stocks are definitely out of favor right now. As far as why you do not see the comparison between Cohu/Ter products I am puzzled. The reason I focus on it is both have relatively small business segments Cohu (cameras, metal detectors, etc) and Ter (phone related equipment &etc) but both are predominantly test equipment companies. Ter as you note produces the testers and Cohu the test handlers. The comparison is not because they produce the same equipment but they produce equipment that should follow the same trend. If lots of testers are being sold then test handlers should be doing well and vice versa. That is the only reason I feel they represent a good comparison. Ter has tried to enter the test handling business but I don't think they have met with a lot of success as I have seen very few press releases on sales of their Kinetrix products. Bottom line, in the recent quarter Cohu had 20% higher earnings than Ter, they had a much larger increase in bookings, and they trade at only 60% or so of the price of Ter. That is a significant discount. They also have a much better balance sheet than Ter on a relative basis as they have roughly $9 per share of cash and no debt. Cohu dominates their relative sector and probably is ahead of Ter in that respect as Ter has much stronger competition. Being number 1 in a sector with those kind of fundamentals justifies a much higher stock price. Good luck.