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

To: scott_jiminez who wrote (2313)	3/19/2002 9:12:01 AM
From: Crossy	Respond to of 95531

Scott, that is usually accepted that marketcap corrrelates with PSR. A reasonable explanation would be that SG&A costs do not "scale" accordingly (underproportional) when revenues rise due to a surge in demand.. The other metric to look at are "normalized" Gross Margins and the current gross margin trends.. You are right .. Investing in the "alpha stocks" yields subpar results. No news to me. That's why I never would invest in AMAT or NVLS - instead prefer to enter KLIC, SMTL or LRCX or MTSN.. there's another skew that one have to correct out of PSR's - it's the fact that the position in the value chain of each company and the nature of its operations have a repercussion on PSR. A retailer would have a lower PSR than a manufacturer for example.. Hence, PSR is used in strategic management theory to indicate "value flow" (see: Adrian Slywotzky's many books) and pros like Ken Fisher often cite it.. An Motley Fool often has some educational articles on the many ratios and their suggested use.. Another aspect: A commodity producer like WFR also has a lower PSR than a specialized tool producer. So it's better to evaluate the different "industry segments" first (draw the competitive relationships) and then place your bets among then by a mix of PSR anaysis and Gross margin trends. No indicator (not even PSR) is wholly meaningful in itself.. It'S all induction and the bigger picture.. rgrds CROSSY BTW: your conclusion is exactly right - avoid AMAT, KLAC & NVLS. No kidding..

To: scott_jiminez who wrote (2313)	3/19/2002 10:16:41 AM
From: j g cordes	Respond to of 95531

Scott.. using AMAT and your P/S data, is it worth charting AMAT's stock price against its own unique P/S ratios through recent business cycles.. to perhaps see if it has consistent high/low occilations with this measure.. and also perhaps seeing if this measure anticipates price swings... thus knowing where the AMAT price might be now in its P/S history? Sorry for the extra words.. but you catch my drift.

To: scott_jiminez who wrote (2313)	3/19/2002 10:36:43 AM
From: Gottfried	Read Replies (1) \| Respond to of 95531

Scott, thanks for the PSR data! Smart Money in their latest mag says that the only parameter their successful stock picks of 10 years ago had in common was strong sales growth. [AMAT was one of these picks in 1992]. P/E is too easily manipulated, according to SM. Gottfried