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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Coolwire who wrote (8146)	11/14/1999 1:02:00 PM
From: Kirk ©	Read Replies (1) \| Respond to of 10921

I was thinking it was time to take profits in AMAT. I have already taken some myself in one stock that hit 8x for me (LRCX - now 9x) and now AMAT is near the 8x level (bought 7/96) so I am getting ready to take more there. I would not think bailing out is the answer as these companies get overbought then oversold on a regular basis(lather, rinse & repeat) but they make higher highs and lower lows on the large scale despite the cycles. Unless people are going to stop using chips, I doubt these will under perform long term. I would NOT buy here, but taking profits to hold and wait for off cycles is always wise. Perhaps take 10% off the table every time they go up 10%? You can generate a ton of cash this way to invest in off years and still participate well if the valuations continue to skyrocket. Maybe pull out your original investment if you have a multi 100% gain and then do the 10% off for every 10% up as we go forward? This is what I am considering. Comments? You have to consider the valuations that internet companies are getting and these are still cheap. 8)

To: Coolwire who wrote (8146)	11/14/1999 1:15:00 PM
From: Gottfried	Read Replies (1) \| Respond to of 10921

Jarrett, I remember dimly that peak PSR for AMAT has been 5 in past cycles. I could find a chart if anyone is interested. If I were still long AMAT I'd certainly try to protect my gains here. As for >is the cycle about to turn less positive soon?< It depends mainly on orders for semi equipment. I don't know how to guess at that, but here's past history... Message 11739680 G.

To: Coolwire who wrote (8146)	11/14/1999 6:17:00 PM
From: EACarl	Read Replies (1) \| Respond to of 10921

RE "The New York Times article says that AMAT with sales of $4 billion has a market value of 10 times that figure today. In previous cycles this ratio has rarely traded higher than 2 times sales." While it is true that many semi-equip stocks are selling at extreme multiples of price/sales, (even price/future sales), price/future earnings etc, and AMAT is certainly among these, there are some that are very modestly valued such as COHU at about 3 times current sales and only 11 times next years earnings. I agree it is time to examine holdings in this sector very carefully and be careful not to overpay or to hold past sky high valuations. Look at KLAC at almost 50 times next years earnings, or PRIA, or HELX at 11 times sales, that's nosebleed territory. But, There are still good values in the sector, and it may be time to do some rotations within the sector. KLIC was undervalued, and has made a good run lately to catch up (to some extent anyway). COHU is still the best value in the sector. It is not too small a company, yet hardly anyone covers it.

To: Coolwire who wrote (8146)	11/14/1999 8:45:00 PM
From: Proud_Infidel	Respond to of 10921

The New York Times article says that AMAT with sales of $4 billion has a market value of 10 times that figure today. In previous cycles this ratio has rarely traded higher than 2 times sales If you look at expected eps in the $3 range for FY00, AMAT trades at a slight market premium while its growth rate should be very healthy(ie greater than the market) for the next several years. I don't think it is wise to value a company like AMAT based on trough sales after the worst downturn in their history. They came out last Q with record NM's, and the real party has not even begun:-) Brian