Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: orkrious who wrote (2043)	2/20/2002 6:36:09 AM
From: scott_jiminez	Read Replies (1) \| Respond to of 95738

<< AMAT is currently selling for roughly 10x their quarterly sales run rate. In the 1998 trough, AMAT sold at 2x sales, at the 1996 trough it was 1x sales.>> One the one hand this has been the state of the world for many, many months with many of the larger cap equips. On the other hand, there can be no denying the possibility such valuations will be significantly deflated. Your observation was confirmed (from the flip side) when S&P recently upgraded KLIC* from 'hold' to 'buy': >>KLIC was recently trading at 2X book value (1.5 p/s), well below historic peaks of 5X to 6X.....<< This perspective could be applied to roughly 1/4 of the stocks on Don's list. Also... I noticed that the BtB report made a specific point of noting the continued strong business on the backend side: "Front-end equipment bookings are at a low point for this downturn," said Stanley Myers, president and CEO of SEMI. "The improvement in overall equipment bookings, was driven by a fifty percent increase in the final manufacturing bookings. January marks the second consecutive month in which bookings for the final manufacturing equipment segment increased significantly from its previously weakened state." This could be another argument in favor of focusing on undervalued backend companies. ============= *While the odds that I mention KLIC in my posts on this thread appear to be (and are) quite high, the odds that AMAT is mentioned in the other 90% of the posts is extraordinarily high. For a thread that, on the surface, is dedicated to supposedly objective data presentation, both of these behaviors are unseemly. I will accept the criticism of tunnel vision towards KLIC. Bellwether or not for the backend, I should focus on other companies as well. Will others accept the criticism of tunnel vision towards AMAT? Bellwether or not for the sector, folks should focus on the 27 other companies on Don's list as well.

To: orkrious who wrote (2043)	2/20/2002 6:08:27 PM
From: Return to Sender	Read Replies (1) \| Respond to of 95738

Nice bounce off the low end of the range today. I wanted to wait to comment on your post until we could both benefit from hindsight. Here is an out take from one of my posts yesterday that you highlighted: I still think we stay in this trading range And then your response What are you smoking? These stocks deserve a 75% haircut. As Fred Hickey said in today's newsletter, AMAT is currently selling for roughly 10x their quarterly sales run rate. In the 1998 trough, AMAT sold at 2x sales, at the 1996 trough it was 1x sales. I'm happy with my rather large short position. ork Except for the question of what I have been smoking.<ggg> I don't smoke anything! Not even salmon<gg> I would largely agree with your opinion that these stocks are selling at lofty valuations. Unfortunately as today's bounce should prove they do not go down easy. I actually shorted AMAT earlier today and sold in time to pocket a nice gain. Unlike you I personally am not ready to commit long term funds to an AMAT short position. Large long term short position in AMAT? Is what you are doing? Most of the stocks in the semiconductor industry have previously been very profitable companies. True... many remain well above traditional trough valuations but I wonder how many of them will end up filing for bankruptcy like so many companies from other sectors have done? The reason these stocks refuse to die is investor optimism about an impending recovery. It may be weak, it may double dip but we will get a recovery and then the question will be how long and how strong. And that is why these stock continue to show leadership anytime technology stocks take center stage in any rally. These days it is probably a mistake to remain in any position long or short too long but ultimately I have great confidence in the semiconductor industry. Far more than any other single industry affiliated with technology. Short term I will continue to attempt to trade the range. Some days will be good like today. Some will be bad. When that happens well... Maybe I should be smoking something! RtS