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Technology Stocks : Semiconductor Packaging (SEMX) -- Ignore unavailable to you. Want to Upgrade?

To: GARY P GROBBEL who wrote (476)	5/13/2000 7:54:00 AM
From: Joe Dancy	Read Replies (1) \| Respond to of 545

SEMX conference call - very positive IMO: audioinvestor.pyxos.com Our take FWIW: SEMX CORPORATION (SEMX $9.25). As electronic devices continually become more powerful and smaller designers battle a universal problem: how to dissipate the heat generated by the electronics. Heat adversely impacts the reliability of a device, and as electronic devices are miniaturized designers face more challenges in dealing with heat dissipation issues. SEMX specializes in heat dissipation products and materials for the electronic, wireless, and Internet infrastructure industries. It provides products for fiber optic data systems, Internet routers and servers, as well as to the semiconductor sector. The company announced first quarter earnings of $0.14 a share, but most significantly the company reported a 44% increase in backlogs since the end of December - which indicates a very healthy demand for the company's products. Backlogs were $25 million, and revenues for the first quarter were $16.5 million. The company also recently purchased Engelhard Corporation's electroless gold plating business. Electroless gold plating allows electronic components to be designed for higher performance and greater circuit density (electronic devices can be made smaller). The Engelhard process allows SEMX to offer some unique design advantages that can be incorporated into their client's products. SEMX also recently acquired Advanced Packaging Concepts, and will move beyond just being a component supplier into being an Electronics Contract Manufacturer (ECM). ECM's in general carry higher multiples than component suppliers. SEMX is selling at a price-to-book ratio of 1.8 and a price-to-sales ratio of 1.0, and is selling at a forward price-to-earnings ratio of 12 based on earnings estimates. The company is a microcap ($60 million), and provides products for some of the most dynamic growth areas in the technology sector. From our discussions with management we are impressed with the direction they are taking this company. We are convinced that SEMX management is committed to increasing shareholder value. One potential risk: if SEMX is unable to integrate the acquisitions smoothly into current operations, or such integration proves slower or more costly than projected. All said, from a risk/reward standpoint we would continue to add to our positions in SEMX at prices below $12 with a one-year price target of $18-$28 a share