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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Henry Eichorszt who wrote (33283)	11/18/1999 8:04:00 PM
From: EACarl	Read Replies (1) \| Respond to of 70976

Henry, RE " found out undervalued stock COHU with enormous potential upside. I load the boat between 20 1/2 and 24 1/2. Do homework and decide." I am in full agreement. COHU has everything. semi-equip sector, high book to bill, record backlog, great earnings growth, P/E about 1/3 of most semi-equips. Undiscovered by the street. Only one analyst follows it. Once the word gets out, COHU has plenty of room to run! Actually earnings and Book to bill are both higher than KLIC and CMOS and EGLS and TER which are also other back-end semi-equips with much higher prices.

To: Henry Eichorszt who wrote (33283)	11/18/1999 8:40:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Industry Analysis Nov 18, 1999 Semiconductors: Applied Materials: Buy on the News senior analyst: Chris Bulkey 11/18/99 No surprise. Applied Materials (NASDAQ:AMAT - news) delivered yet another positive earnings surprise for its fiscal fourth quarter when it reported after Wednesday?s close. As a result, we believe that Thursday?s early selloff (shares are down $3.06 to $106.94 in early trading) is a case of investors selling on the news, as the results were very strong in our view. With the shares having risen nearly 40% since mid-October, a pullback is certainly justified and creates a buying opportunity. Let?s go to the numbers, okay? Fourth quarter (ended October 31) revenue for the semiconductor equipment company came in at $1.57 billion, a 9% increase from the third quarter and 133% above the prior year?s period. Operating earnings (excluding one-time events) were $0.72 per share, well above the prior year?s $0.02 per share and $0.08 better than the consensus forecasts. Bookings reached a record $1.65 billion, up 13% sequentially and 141% from the prior year. Reported bookings included orders for the recently acquired AKT equipment, which added a few percentage points. But even without AKT the number was still strong and visibility remains solid, as management expects sequential growth of 10-15% for the first fiscal quarter of 2000. Applied Materials ended the quarter with a backlog of $1.66 billion, further boosting confidence for the next few quarters. The gross margin also expanded, to 50.1% from 48.7% in the third quarter and from 42.3% in the prior year?s fourth quarter. This level of gross margin is the highest seen in nearly a decade, a direct result of the company?s efforts to reduce manufacturing costs during last year?s industry downturn. As we have noted in the past, the semiconductor industry is known for adding too much capacity during cyclical upturns, which exacerbates the industry?s inevitable downturns when they come. Applied Materials? numbers support the notion that companies have made successful efforts to lower costs and have learned from prior mistakes, which should help this industry-wide expansion to continue. In addition, strong sales from telecommunications and consumer sectors have added additional sources of revenue beyond what has been seen in prior expansions, which adds more strength to the recovery. In all, the results and the outlook for 2000 are very strong. Management is well regarded for giving conservative guidance to The Street, which we believe occurred on this most recent conference call. So, don?t be despaired by the stock?s selloff in both Europe and the U.S. markets. We believe this to be a matter of profit taking due to recent share price momentum and we believe that the outlook is very solid. The transition to new technologies, including 0.18-micron line-widths and below is accelerating, which positions Applied Materials very well in light of the company?s leading edge product line. In addition, the company has a slew of new products for 300 mm wafer production and new materials like copper, which should help sustain the company?s dominant market position. On the heels of strong fourth quarter results and solid visibility, estimates are going up across the board. Deutsche Banc Alex. Brown analyst Glen Yeung lifted his fiscal 2000 earnings estimate to $3.30 per share (from $2.71 per share) and introduced a fiscal 2001 forecast of $4 per share. With the shares trading at 26 times Yeung?s forward estimate, we believe the shares are very attractive, as momentum investors are selling shares and creating a buying opportunity for long-term investors. The semiconductor industry should continue to expand, at least through 2001, while new sectors and a more controlled cost environment should lead to continued earnings leverage for the group. In addition, Applied Materials will continue to gain market share and see earnings estimates increase further. Bottom Line: Use Thursday?s morning?s early selloff as a good opportunity to get into these shares or dollar-cost average current positions