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Strategies & Market Trends : Don't Drink the Kool-Aid Kids -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (770)	8/13/2001 8:48:47 AM
From: AugustWest	Read Replies (3) \| Respond to of 1063

Step right up and get your cup-o-Kool-Aid!!!! NEW YORK (CBS.MW) - Goldman Sachs on Monday added a handful of semiconductor makers to its recommended list of stocks and told clients it sees fundamentals strengthening in the fourth quarter for the chip sector. The brokerage also advised clients to go overweight on the U.S. semiconductor device sector in the bullish call. Technology shares turned higher in pre-open trading on the report as Intel Corp. (INTC: news, chart, profile) rose 3 percent. See Indications "In our opinion, data points are no longer universally negative, and fundamentals are likely to strengthen in the fourth quarter of 2001, even if the improvement is 'only' inventory-related," Goldman analysts said. "The recovery writing is on the wall, and we don't see how investors will be able to resist the inflection point," they said. Gains capped? Goldman is following rivals Merrill Lynch among others in making a call that the worst looks to be over for the chip sector. Still, the Goldman analysts tempered their enthusiasm amid concerns that the valuations in the group will cap stock price gains. "The offsetting problem is that valuations stink," analysts said. "If stock prices and revenues are both down by about half from their 2000 peaks, then the 'absurd' 2000 valuations haven't changed much," Goldman upgraded Analog Devices (ADI: news, chart, profile) and Maxim Integrated Products (MXIM: news, chart, profile) to its "recommended list" and lifted Linear Technology (LLTC: news, chart, profile) to a "market outperformer" rating. Among the communications chip group, Goldman upgraded Broadcom (BRCM: news, chart, profile), Conexant (CNXT: news, chart, profile), Microtune (TUNE: news, chart, profile) and Qualcomm (QCOM: news, chart, profile) to the recommended list from market outperform ratings. Emily Church is London bureau chief of CBS.MarketWatch.com. marketwatch.com