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Technology Stocks : Kulicke and Soffa -- Ignore unavailable to you. Want to Upgrade?

To: scott_jiminez who wrote (3962)	7/27/2000 4:27:12 PM
From: Jerome	Read Replies (1) \| Respond to of 5482

Scott... how far would KLIC have to fall to get to a PE of 6 to 8. I'm not suggesting that it will get there, but I would view that as an absolute bottom. I was planning to write some covered calls for August, but I refuse to do so at current prices. Regards, Jerome

To: scott_jiminez who wrote (3962)	7/27/2000 8:24:09 PM
From: cluka	Respond to of 5482

Trader's Edge: Kulicke and Soffa Industries (KLIC) 27-Jul-00 08:10 ET [BRIEFING.COM - Jim Schroeder] When is an outstanding earnings report (top and bottom line), improved bookings and margins along with rising profit projections of seemingly little importance? When your in the semiconductor equipment industry. Even a pre-report bashing could do little to stymie the bears as the stock price continued to decline within easy striking distance of the spring and yearly low during Wednesday's session. Trading Points This is not a disclaimer but let's get the negative stuff out of the way right away. KLIC and the industry have been in a state of flux for several months as the marketplace attempts to decipher the prospects for the rest of the year and beyond amid questions of a potential peak in the industry cycle. Eye popping earnings have been registered among several stocks in this group but investors have a history of giving the back of their hand to any stock or group if some type of uncertainty arises. An important area to watch going forward for KLIC is bonder growth sales from which it derives 55% of revenue. Let's delve into the most recent numbers and forecasts. First the Q3 results, which easily beat consensus estimates. Earnings came in at $1.35 a share vs the First Call of $1.06 (+27%) and was light-years above the year ago loss of $0.03. Revenue rose to $268 mln from the year ago $110.8 mln (+140%) and was up 21% sequentially. Margins improved substantially which management attributed to a smooth shift of bonder production to Singapore and bookings rose to a record $281 mln, up 16%. As far as expectations are concerned, analysts have been raising estimates over the last two months with the current consensus for FY00 up to $3.85 a share with FY01 at $5.85 a share. The post earnings period has seen additional upward revisions with bookings expected to remain solid into the first half of next year. The margin improvement triggered by the shift of production is also expected to continue through the end of the year. The chart of KLIC reflects the industry uncertainty as a very broad and very choppy pattern has developed in the wake of the January peak. But the recent wave of negativity pushed the stock price within less than 10% of the spring time and yearly lows (in the 40 area) before bouncing presently a favorable risk reward ratio. Technical indicators have become overextended during this move also suggesting a limited downside. Even if the the industry does begin to weaken as projected by some analysts the fundamental situation based on earnings, bookings and margins is expected to be solid into the new year. Given that the stock price has held above major lows, the industry is expected to at least be stable and technicals are in a positive position, we have a possible favorable trading opportunity. An advance through 51 bolsters this outlook with a move merely back to the middle of the yearly range suggesting potential to the 60/65 area. Nice call.....NOT. Down -5 1/4, Unbelievable!!!