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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (24658)	4/7/2000 11:28:00 PM
From: XBrit	Read Replies (1) \| Respond to of 25960

Zeev, I know KLIC has tended to be undervalued. However, right now the FY2000 forward PE of AMAT, LRCX and friends is 50 and up, whereas KLIC's is 20. That large of a gap is both ridiculous and also historically atypical, so I hope to profit from it closing somewhat. (Also, KLIC's PE has been into the mid 30's at previous cycle peaks, another piece of evidence that the valuation right now is an anomaly). I don't expect KLIC to go to $160 a share (the level required for PE parity with LRCX or AMAT). But I do expect it to outperform the sector on a few-week timescale. I certainly don't intend to keep KLIC at 40% of my portfolio for any length of time... I agree I am already way beyond prudent in the amount I have.

To: Zeev Hed who wrote (24658)	4/8/2000 11:08:00 AM
From: scott_jiminez	Respond to of 25960

Zeev - I'd be curious to see the actual data on Klic's 'underperformance' because the volatility of the stock may obscure its performance. For instance, from Sept., 1999 until about 3 weeks ago, Klic significantly OUTperformed the sector (it was up ~300% during that time when the sector was up ~150%). Obviously the market had begun to recognize Klic's value and was in the process of matching anticipated sales and growth with valuation. The stock has since corrected more violently than the sector...but, IMO, it can be anticipated that this matching process will resume. If this does occur, which I expect, a stock price of $150 or more by year's end is certainly a possibility. One must keep in mind that the company's position as a leader in the 'back end' means the stock doesn't fully respond to the sector rally until the cycle is well under way...i.e. until new equipment purchases are in full swing. Thus Julius' point, and that of many on the Yahoo thread, should be taken quite seriously: at this stage, when capital equipment purchases are in full stride and expected to be very strong for 2-3 years, the stock REALLY REALLY IS grossly undervalued (and that is likely to change in short order). Also, a probable 'psychological' impediment investors may have with klic is that it has a TTM PE of ~350. That too will change in short order since the company has already stated it 'will not disappoint' analysts this quarter (earnings released 4/18) where the avg. estimate would result in a drop of the TTM PE by about 90%!. Investors are likely to be more willing to purchase a stock which shows up on their radar with a PE of 40 rather one with a PE well into the triple digits. Also, a claim that just about every equipment manufacturer is 'low tech' - or 'high tech' - could find support (a moment's thought renders these distinctions quite silly). The fact is that not only is Klic's 8028 bonder an incredibly sophisticated piece of equipment that is by far the 'state of the art', but the company has diversified beyond dicing saws and bonders etc. to specialty packaging materials and more. These latter products - whose 'tech' status is unclassified - may overtake bonder sales in the near future as the leading source of revenue for the company. And to be sure, bonders aren't going away anytime soon either. No, rather than finding justification for Klic's low relative valuation, the prudent investor should view Klic as one of those situations where a 'blue-light special' is presenting itself, loud and clear. Markets have a way of correcting these quite rapidly. A Humble opinion.