Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Duker who wrote (4059)	4/10/2000 8:50:00 AM
From: Jerome	Read Replies (1) \| Respond to of 5867

>>Valuations et.al.<< Duker, some patterns in this group are worth observing. Whereas everyone that invests in this group has a favorite stock that is felt to be undervalued, (COHU, KLIC, CFMT, SVGI etc)the money (mutual funds) is flowing to a few favorites. (AMAT, KLAC, NVLS, LRCX) Mt strategy here is to unload part of my undervalued favorites and add more to the above four. Risky, yes. At some point in time I will reverse the situation and get back to my undervalued favorites. My way to manage this is to buy deep in the money calls on the undervalued stocks, then sell the stocks and buy the above four. If the favorite four rise too fast in any given month a covered call (out of the money) will provide some downside protection. If a market meltdown happens, nothing will save anything. Regards, Jerome

To: Duker who wrote (4059)	4/11/2000 10:19:00 PM
From: Jong Hyun Yoo	Read Replies (1) \| Respond to of 5867

Is LRCX overpriced? My answer to this question continues to be a firm "NO". I believe, on a relative valuation to stocks in the other segment of the tech industry and even to peers within the same industry group, LRCX presents an extremely good opportunity for further price appreciation. If you want to still stay with the tech stocks, I believe that LRCX should definitely be a part of your holdings. Semiconductor equipment industry is in the midst of the robust upturn. There are some questions about duration of this upturn. Of course, the pace at which the booking are picking up at current time cannot be sustained. I have talked to many people within this industry and current business environment are by far the best in its history. Many companies will report record booking this Q. Even though this pace of order growth will not last forever, I believe that we will continue to see a modest to strong growth of revenue (on a yearly basis) till yr 2002. Now I believe that at the end of this cycle, LRCX can achieve revenue in excess of 2.5 billion. LRCX is currently gaining a market share in two of the fastest growing segment of the business: CMP and Oxide Etch. Teres CMP machine is a tool of record at TSMC and AMD. And several other North American and Taiwanese companies are considering TERES. Exelan Oxide etch tool is gaining momentum and LRCX is eating away AMAT and TEL's market share. In addition, LRCX seems to be on a verge of introducing two new products in the oxide and poly etch areas. Especially in the oxide etch, next generation HDP (high density plasma) tool for high aspect ratio contact structures and dual damascene process, I think, will be introduced. For current Q, LRCX has implemented new data base system and upside in the revenue figure may not be high. However, upside in the EPS can come from the improved operational efficiency and gross margin. The key is next Q. I think LRCX will have a phenomenal operational and revenue performance next Q (July). This Q, LRCX should have booking in excess of 420 million (RECORD!) and whatever it did not ship due to software upgrade will all be shipped in July Q. As a result, revenue number for July Q should be huge. Also it is becoming more clear that Dec Q should also show a sequential Q to Q growth in terms of both revenue and order number. In my opinion, out of three major front end equipment companies (AMAT, NVLS, and LRCX), LRCX has been the most conservative in terms of hiring new employees. The head counts still remains at half of the peak number during yr 95-96 yet, I think revenue will more than double in the next fiscal yr. Also as Exelan and TERES become more mature product, the gross margin of these product will continue to improve. Operational and manufacturing efficiency will also rise as the production volume picks up. I may be a little agressive but I am anticipating EPS of $3 on a post-split basis at the peak of this cycle. Based on current price, it represents PE multiple of a little more than 16. In summary, yes.. LRCX has appreciated a lot last yr. But the appreciation we have seen so far was easy to anticipate since we knew the fundamental for equipment companies was going to improve once Asian financial crisis ends.. Now the game is a little bit more tricky.. But when all the dust settles, I believe that people who hold onto LRCX or even add more, will come out as huge winners..