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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Donald Wennerstrom who wrote (1948)	2/13/2002 2:33:36 PM
From: Israel	Read Replies (1) \| Respond to of 95965

Donald, first I'd like to thank you for the information which you provide on a constant basis here on SI, its very much appreciated. I was wondering what your opinion was on stocks like KLAC which are currently trading at what seems to be astronomical levels 7X 2003 estimated sales and 47X 2003 est. earnings, and how this compares to historical measures. TIA, Israel

To: Donald Wennerstrom who wrote (1948)	2/13/2002 2:46:47 PM
From: Return to Sender	Read Replies (1) \| Respond to of 95965

Here is the latest Don: 2:00PM : Although the semiconductor sector pushed to its highest level in three weeks, the advance did not elicit much interest in other tech groups (networking flat lining near the lows for the last two hours) leaving the Nasdaq just shy of establishing a new session high. The Dow fell approximately 10 points short of retesting its high and 13 point shy of the 10,000 barrier. In recent action Merrill Lynch has come out in defense of JP Morgan (earlier hurt by speculation of a debt downgrade) but the stock has not responded significantly (JPM -3.8%). Despite the solid performance for the averages, market internals are holding only a modestly bullish bias.DOT +1.7%, SOX +2.9%, XOI +0.3%, NYSE Adv/Dec 1836/1207, Nasdaq Adv/Dec 1773/1536 1:30PM : Both the Dow and the Nasdaq Composite have made a run at the early session highs but thus far they have been unable to stage a breakout. The semiconductor sector has had no such problems as it has powered through resistance gaining roughly 3.3% on the day. Chip equipment are pacing the way for the SOX (NVLS +6.8%, AMAT +6.8%, KLAC +4.3%, TER +5.4%) with NSM +3%, LSI +4.2%, TXN +2.7% also posting impressive gains. Integrated Circuit (ICST -8%) is still significantly lower but it has risen more than 12% off the low. Company has expressed confidence that it is on track to meet stated targets of 28% to 33% revenue growth with the consolidation of their January acquisition of Micro Networks, and a consolidated EPS of $0.16 (consensus $0.16). SOX +3.3%, NYSE Adv/Dec 1834/1190, Nasdaq Adv/Dec 1804/1466 1:18PM Dow 10,000? : Earlier today, the blue chip index stalled just two points shy of the 10,000 mark. Subsequent sell pressure has been relatively flat and the Dow is now once again posting a triple-digit intraday gain -- currently trading about 18 points short of 10,000. 1:05PM Cisco Systems aims to take share in optical biz (CSCO) 17.56 +0.30: -- Update -- Sources at Salomon Smith Barney are telling us that CSCO's optical biz should grow for the remainder of 2002; despite difficult capex outlook, co believes that their strong product portfolio can penetrate the ILEC mkt and take share from LU, NT, and TLAB. finance.yahoo.com^DJI+%5EIXIC&d=t Don, I would not be too sure about a sustained move higher just yet. I am not seeing a great deal of strength outside of the biggest names here within the SOX. I think shorting AMAT may not be the safest prospect for a long term investor but I believe there is a greater than 50% probability that the stock will be lower than its current 47.85 by this time next week. More than likely I would expect at least 45 by that time. Just like CSCO is proposing to take market share from competitors so is AMAT. Eventually current reality prevails and investors realize that the actual amount of business to be divided is smaller than what should be necessary to support such high P/E multiples. I'm always happy to bank a profit though and I'm not ready to risk a short position. RtS