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To: Proud_Infidel who wrote (44760)	3/29/2001 9:20:15 PM
From: Proud_Infidel	Respond to of 70976

From the "Place Your Bets" Files: Morningstar analyst says Intel will admit to cutting capital spending Semiconductor Business News (03/29/01 16:04 p.m. PST) CHICAGO--Another financial analyst is predicting that Intel Corp. will soon buckle to the chip recession and cut capital spending from the company's current budget of $7.5 billion. In a new report, Morningstar Inc. analyst Jeremy Lopez said it is only a question of how much Intel will cut back from its record capital spending plans. Until now, however, Intel executives have insisted that the Santa Clara, Calif., chip giant has no plans to lower its $7.5 billion budget this year, despite the fact it has pushed back a number of major projects. Earlier this month, Intel confirmed it was delaying a 300-mm wafer fab in Ireland (see March 14 story). Lopez is also predicting an end to the recent rise in semiconductor equipment stocks because of new cuts in plant investments. He noted that the tech-heavy Nasdaq exchange has fallen 25% in the past three months but chip-equipment shares have edged up 6%. Based on current capital spending budgets, Morningstar expects the top 20 semiconductor companies to reduce their 2001 budgets by at least 15%. Chicago-based Moringstar noted that these chip companies represent 70-to-80% of chip-equipment spending worldwide. "This outlook may be dim, but it may get even worse," Lopez said. "The chip industry's biggest rollers, Intel and Samsung, likely will reduce their spending forecasts going forward. With their current capital-expenditure numbers buttressing an already poor forecast, we find it very unlikely these giants will bail out the chip-equipment industry. "The question isn't whether or not Intel and Samsung will cut their spending, but rather by how much," he said.

To: Proud_Infidel who wrote (44760)	3/29/2001 9:43:52 PM
From: Ian@SI	Read Replies (2) \| Respond to of 70976

Brian OT re CSCO, I think this is the wrong time to be buying into that sector. Estimates are still falling rapidly. e.g. LB took CSCO 2002 number down to $0.27 earlier this week. Even if you think it deserves a rock bottom multiple of 30 that calls for a price of about $8. Even though stocks in that sector have fallen substantially, there's no visibility re how long it will take before it recovers, or who will be the leaders at that time. Very high risk play, IMO, Ian.

To: Proud_Infidel who wrote (44760)	3/29/2001 10:26:39 PM
From: Gottfried	Respond to of 70976

Brian, good luck with your CSCO! Ian gave you the most pessimistic 2002 estimate for the stock, meaning he doesn't own any.<G> Yahoo, FWIW, now shows analysts' target prices biz.yahoo.com [right top] The consensus estimates are higher than LB's. But what do analysts know. Gottfried

To: Proud_Infidel who wrote (44760)	3/29/2001 10:59:03 PM
From: brunn	Read Replies (2) \| Respond to of 70976

CSCO's P/E based on estimated 2001 earnings has fallen below that of AMAT for the first time since 1994. quicken.com CSCO's P/E based on its 2001 earnings projection is 24.5, while AMAT's is 34.6. It is possible that CSCO's earnings are more questionable, however, as I believe they use options for employee compensation to a greater extent. Also, they have had a tendency to buy out many smaller companies and write it off under goodwill which I believe can also be a way of inflating earnings. More than anything, though, I think the dramatic fall in CSCO's price is based on the shock of finding out their business is cyclical and with that the uncertainty of how bad the cycle will play out. With semiequip stocks like AMAT, the market has grown much more comfortable with the cyclicality of their business due to this being the 3rd downturn in 5 years--AMAT has shown how well they can weather the storm whereas CSCO has not. I still remember the shock of seeing AMAT's P/E in single digits when they first fell back in 1996. Obviously, people were much more uneasy with AMAT's cyclicality at that time than they are now (analagous to how they are looking at CSCO now I believe.) Hopefully, the market's confidence in AMAT's ability to rebound will continue.