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: Return to Sender who wrote (2264)	3/13/2002 9:18:32 PM
From: Return to Sender	Read Replies (2) \| Respond to of 95596

This was the morning downgrade from Bear Stearns Message 17194513 Robert Maire - Semiconductor Capital Equipment Sector Update We believe stock valuations are not based on past or present performance of cos. but rather on future and potential performance of co.; this is evident in semiconductor capital equipment stocks. Investors are ahead of the fundamentals of the industry recovery and have recently pushed stock prices and valuations up another notch. However, forward earnings and revenues visibility is limited, as we don’t have enough data points to fully understand what the slope of the recovery will be. The current up-cycle will be more technologically driven than previous cycles which were driven by both capacity and technology purchases. Given the current state of relatively low factory utilization rates, weak demand, but overwhelming never-before-seen technological change, it is clear the more technologically differentiated cos. will outperform in the current upturn. Especially those cos. which aid in implementing and analyzing the numerous technological changes ahead: cos. such as KLA-Tencor (KLAC, Buy, $66.11, Target: $70) and Rudolph Technologies RTEC, Buy, $44.85, Target: $50). In addition, DRAM pricing has remained amazingly firm in light of the fact that we are in what is usually the weakest seasonal quarter for DRAM pricing. Recent SIA data, continues to support a recovery in semiconductor sales. Inventory levels continue to move towards more “normal” levels. We believe utilization of the factories will continue to improve at a faster rate than will the unit demand for semiconductors. We believe the “sweet spot” of the market today is 0.18 micron technology. The move to 300mm will not be as fast as previously anticipated. In the back-end, the move to new packaging methodologies such as flip chip and bump will likely re-accelerate in the current upturn driven by their lower cost, better performance and higher quality. Cos. that could benefit are Ultratech Stepper (UTEK, Buy, $19.12, Target $40) and Semitool ƒ (SMTL, Buy, $11.42, Target $20). Higher levels of telecommunications exposure may act as a drag on the recovery of some cos. such as Agilent (A, Attractive, $36.01, Target $40) or Teradyne (TER, Attractive, $37.48, Target: $45). In general, cos. in the back-end such as testing cos., tend to lag the recovery and indeed in this cycle got down to much lower levels of business than did front-end cos.

To: Return to Sender who wrote (2264)	3/13/2002 10:03:30 PM
From: Donald Wennerstrom	Read Replies (1) \| Respond to of 95596

Just to add to your great post, the following is the summary for today from Robert Walberg, Briefing.com Techs continued to pullback on Wednesday amid ongoing earnings concerns... JP Morgan cut its Q2 and FY02 sales/earnings estimates for Intel (INTC) citing channel inventory and price cuts... Also cut its estimates for Advanced Micro Devices (AMD)... Meanwhile, Morgan Stanley was reducing its ratings on a number of chip equipment companies, noting that the recent run up in price leaves stocks trading ahead of their fundamentals... Interestingly, news in the chip equipment group was generally upbeat... Cymer (CYMI) upped its guidance; Novellus' estimates were raised by BofA; and Lam Research held up reasonably well due to rumors of a big order win... But market's blue mood prevailed and SOX (-4%) index helped pace the Nasdaq to another loss (-1.9%). Chips weren't the only losers... Lucent (LU 4.92 -0.73) led a list of telecom/networking stocks broadly lower... LU hit by speculation that its convertible offering would exceed $1.5 bln... And it did... After the close, company confirmed $1.75 bln convertible offering, priced at 7.75%... Other losers in group included Nortel Networks (NT 5.21 -0.44), Extreme Networks (EXTR 9.13 -0.55), Foundry (FDRY 7.41 -0.31), Ciena (CIEN 9.15 -0.43) and Cisco (CSCO 16.36 -0.41). Aside from the negative corporate news (not unexpected given advent of preannouncement season), overall market mood impacted by yesterday's disappointing economic numbers (retail sales for February rose by a less than expected 0.3%). Amazing how quickly the bears come out of the woods after a couple of down days on widespread negative news... Just because the indices experience some normal corrective activity near the upper-end of recent ranges, are we now supposed to think that the economic recovery is a myth, or that the Nasdaq's big advance over the last 6-months is an illusion, or that the improvement in guidance/earnings is meaningless... We think not... The market is in the early stages of transitioning from recession to growth/ from bear market to bull... The news cycle during such periods is understandably mixed... However, it's clear - at least to us - that conditions are better today than at any time in the past two years and that money market rates paying around 1% the allure of the market will be simply too great for most folks.