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

To: scott_jiminez who wrote (4469)	10/28/2000 10:30:59 AM
From: Proud_Infidel	Respond to of 5482

Scott, I believe the problem many investors have with the analyst community(and rightfully so IMO), is the valuation they are asign to the SCE sector at the moment. To use an example, VSEA reported EPS of $1.06 for Q4. They beat the consensus estimates of 95 cents and projected rev growth in excess of 33% for next year. They were downgraded by numerous firms yesterday. OTOH, JDSU was upgraded for beating estimates by 2 cents. To further put the picture into perspective, look at these and remember that VSEA made $1.06 for Q42000 ALONE: JDSU's estimated EPS for the entire FY ending June '02 is $1.05 EMC's estimated EPS for the entire FY ending Dec '01 is $1.02 CSCO's estimated EPS for the entire FY ending July '02 is $.95 You are correct in stating that there are some supply side problems; is this enough to warrant ridiculously low valuations if the cos are still making money hand over fist? At the end of the day, isn't that what really matters? The street at this point is saying "No" for some reason I cannot imagine. Brian

To: scott_jiminez who wrote (4469)	10/28/2000 10:47:21 AM
From: Sun Tzu	Respond to of 5482

It is also possible that we've not been looking at all the components of the picture. As you may recall, GDP slowed down significantly in the last report. Here is a little blurb from a research report I am reading. In the case of the SOX, however, returns move in the opposite direction. The SOX's worst returns have not followed periods of rapidly accelerating sales, but decelerating sales. When year-over-year growth rates drop by more than 1.0% (the first quartile), the SOX has posted declines of 10.38% on average over the next six months, falling in 16 of 20 occasions, or 80% of the time. In addition, the SOX has eclipsed its six month historical median return of 27.49% in just 2 of 20 occasions, or 10% of the time. Thus, when sales have slowed rapidly, and the probability for a "hard landing" has increased, investors have reacted to slowing economic conditions by withdrawing capital from this high beta group. September increase, 0.7%, bring the year-over-year rate to 8.27%, representing a -0.34% slowing from the 8.61% pace for the year ending September 1999, and a sharp drop from the 9.56% pace of 1Q00. Thus, the deceleration in sales growth can help to explain the recent drubbing of these shares (the 3 month win rate in the second quartile cases is only 52.9%). However, should retail sales pick up in the months ahead, then the outlook for the SOX would improve. ST