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Technology Stocks : Mattson Technology -- Ignore unavailable to you. Want to Upgrade?

To: Ian@SI who wrote (2200)	11/16/1999 10:42:00 PM
From: Philip W. Dunton, Jr	Read Replies (1) \| Respond to of 3661

Ian, A trip down memory lane. Picked this up from street.com archive, dated July 1997, just before Thailand devalued and things started unraveling in Asia. In Search of Some Smaller Gems By Ted Murphy Special To TheStreet.com 7/29/97 12:00 PM ET After a blue-chip run, the little guys might start gaining ground. Indeed, the best performers over the rest of 1997 may be smaller companies with surprisingly strong earnings. This is often the case, with small growth companies leading the performance pack, but I think we might find an increased willingness among professional money managers over the next six months to add these smaller, riskier names to their portfolios. Dave Kansas' recent column -- see Playing Catch-Up -- has influenced me, in that the article highlighted the number of money managers now under pressure to outperform during the remainder of 1997. I think that's right on target. These managers will be looking to find an incremental 2 to 3 relative performance points over the next few months, and if the market doesn't crater, they'll have to do it on the buy side. The following screen for companies reporting positive earnings surprises last week captures a list I think will be compelling to managers searching for outperformance over the next six months. Although I don't often find this screen attractive, the current market environment and a deeper look at the resulting companies lead me to highlight the results. Last Week's Top Earnings Surprise Stocks Tue Jul 29 09:45:10 1997 07/28 1WkSrp Est MktCap Tkr Description Price Ratio P/E ($Mill) TLCM TELCOM SEMICONDUCTOR INC 12.50 1.746 23.6 199 FLD FIELDCREST CANNON INC 23.25 1.582 11.2 212 AHA ALPHA INDS INC 12.63 1.431 19.4 126 SPCT SPECTRIAN CORP 46.63 1.375 23.7 387 USG U S G CORP 44.88 1.226 8.3 2,068 TSEMF TOWER SEMICONDUCTOR LTD 18.13 0.983 13.2 239 YELL YELLOW CORP 27.00 0.642 15.0 758 AVID AVID TECHNOLOGY INC 31.00 0.641 30.4 715 AB ALEX BROWN INC 82.25 0.560 17.0 2,051 FFD FAIRFIELD CMNTYS INC 28.88 0.548 21.1 490 KNL KNOLL INC 31.25 0.540 22.3 1,335 AEIS ADVANCED ENERGY INDS 28.13 0.523 36.9 598 AVL AVIALL INC NEW 15.00 0.516 10.4 294 UVSGA UNITED VIDEO SATELLITE GR 23.06 0.496 18.8 561 LCE LONE STAR INDS INC 52.75 0.476 10.9 579 PAY SPS TRANSACTION SVCS INC 20.94 0.460 15.1 569 MTSN MATTSON TECHNOLOGY INC 14.50 0.454 34.6 203 PXN PAXSON COMMUNICATIONS COR 14.38 0.431 99.0 581 ISO ISOMEDIX INC 17.88 0.419 13.9 114 Resurgent Semiconductor Companies Four of these companies are semiconductor-related businesses that went through a period of depressed earnings last year but are now starting to recover. These stocks are Telcom Semiconductor (TLCM:Nasdaq), Alpha Industries (AHA:AMEX), Tower Semiconductor (TSEMF:Nasdaq) and Mattson Technology (MTSN:Nasdaq). Tower Semiconductor is the cheapest of the four, as well as the biggest market cap, so I offer the two-year chart of price and earnings for that company as representative of these four semiconductor turnaround plays. Deja Vu All Over Again The chart for Tower Semiconductor is similar to the charts for Applied Materials (AMAT:Nasdaq) and Novellus (NVLS:Nasdaq) earlier in 1997. Believers in the early surge from AMAT and NVLS have been rewarded over the last six months, and these two success stories make the smaller semiconductors with rebounding earnings all the more attractive to investors right now. The similarity between Applied Materials' rebound in earnings and the turnaround from Tower Semiconductor can be seen in the two-year chart of price and earnings for Applied Materials shown below. Ted Murphy (ted@pdgm.com) operates the MarketPlayer Web site. Prior to MarketPlayer, he was a partner at Equinox Capital Management.