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Technology Stocks : Lam Research (LRCX, NASDAQ): To the Insiders -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (4002)	3/1/2000 9:46:00 PM
From: Jong Hyun Yoo	Read Replies (2) \| Respond to of 5867

I guess you guys are feeling some uneasiness about continuous stock price appreciation and debating wether to take profit with your holdings. Even though there is nothing wrong about taking profit, I do believe that we are in the early cycle of the upturn and current business environment is so robust that there is substantial fuel left in the semi- equipment stocks to appreciate further. I feel very optimistic now because the business condition is good enough for most of the equipment companies to generate double digit quarter to quarter growth in revenue for yr 2000 but slow enough so that there is not oversupply of the chips. Chips are in a hot demand, specifically in the area of communication and internet infastructure and most of the current capacity ramp by the chipmakers are to meet existing demand. Unless the demand of chips in the areas that I mentioned drops off rapidly in the near future, current upturn could last longer than the one in the last cycle. Yes, the stock price has risen tremendously. However, why sell when we are currently in the 4th inning of the base ball game and Mark Mcquire is the next batter? I think we want to see him hit at least before we decide to walk off the stadium and go home. And yes, I believe that April and June quarters for LRCX will be blockbuster Q's. Revenue for April could be somewhere around mid 330 million and EPS could be as large as $1.30 compared the current estimate if $1.05. June Q will be even bigger Q than April. I am guessing revenue to be as large as 370 to 380 million ans EPS exceeding $1.50. This will make LRCX a 1.3 billion dollar company current fiscal year. And EPS of roughly $4.5. based on current fiscal yr's PE, LRCX is trading at multiple of 33. for next fiscal yr, I think LRCX can do EPS somewhere between $5.5 to 6. This makes PE at somewhere between 25 to 27 based on next fiscal yr's earning. Yes equipment business is cyclical business but I believe that the swing of the cycle will be more moderate as chips become a part of our daily life and as dependence of chip usage on one product (last upcycle, it was PC) vanishes. Also remember that these equipment cost something on the order of million dollars, with some system as much as 4 to 5 million and 300 mm products even higher. One fab are the size of the football field and are full of these machines. Thus, a moderate uptick in the business condition could turn into incredible earning power for these companies. For LRCX, the rise in the revenue level will be further leveraged by the gross margin improvement and operational efficiencies. Personally, I would like to see a moderate slow down in the order pattern towards the yr end. I think that is necesary to continue to see a gradual growth for 2001. If order continues to rise at the brisk pace, we need to pay a closer attention on supply side. Be vigilant on the business condition and hang in there as much as you can. you will be very surprised what these stocks can trade at. Good luck to you all.

To: Proud_Infidel who wrote (4002)	3/1/2000 9:51:00 PM
From: Jong Hyun Yoo	Respond to of 5867

Here are some comments by CSFB. LRCX will make so much that they will be taxed at 14% this Q. Lam Research (LRCX, $138.06, BUY) Target (12 Months): $190 Orders Surging, Sales Following, Margins Gaining Vigorous Order Outlook At Least Through June - Look for 15% or more sequential order growth in both Q3 (March) and Q4, paced by robust domestic and Far East etch demand together with rising penetration of CMP polishers for both oxide and metal applications. Top Line Acceleration Possible In June And September Quarters - Manufacturing software implementation will curb revenue upside in Q3. Look for a solid Q4 ramp, with momentum prospectively continuing in Q1:01. Continued Margin Gains Probable But Higher F01 Tax Rate Will Stiffen Comparisons - Operating margins could approach 20% by Q2:01 (vs. 16.4% in latest quarter), paced by continued gains in manufacturing efficiency and overhead absorption. A higher 30% vs. 14% tax rate next year will stiffen EPS comparisons beginning in the September quarter. Annual EPS 06/01E $5.30 06/00E 4.00 06/99A (1.43)