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

To: The Ox who wrote (2483)	3/28/2002 1:02:49 PM
From: The Ox	Respond to of 95639

Here's what S+P said recently: Overview 13-MAR-02 We are revising downward our revenue and earnings estimates for Microsemi. MSCC expects FY 02 (Sep.) second quarter sales to be down from the first quarter by 3% to 7%, due to the abrupt decline in shipments of products to commercial aircraft customers brought about by the events of September 11 and the continuing softness in sales of its mobile phone, consumer and telecom products. We project a revenue decline of 5.8% for FY 02. We forecast a decline in gross margin to 36% in FY 02. Gross margin should improve to 40% in FY 03, through continuing introduction of higher value-added products such as LED display, wireless LAN application and medical products. We expect SG&A expenses of 14.4% of revenues in FY 02 and 14% in FY 03. Research and development expenses should be 9%-10% of revenues in FY 02 and FY 03. Assuming a tax rate of 33%, we project EPS of $0.60 for FY 02 and $1.04 in FY 03. Valuation 13-MAR-02 We advise selling Microsemi shares due to uncertainty surrounding its sales restructuring effort and general high valuation of the semiconductor sector, which could come under pressure after the recent share price rally. Although Microsemi's shares have dropped 50% in 2002, and despite its strength in military, mobile connectivity and medical products and its low exposure to telecommunications and computer peripheral businesses, the company's top line growth continues to be held back by the slower than forecasted economic recovery and excess inventories. We do not see Microsemi management's much-emphasized strategy of widening gross margins through a shift toward higher valued-added products having a meaningful bottom line impact until top-line growth resumes, likely in FY 03.

To: The Ox who wrote (2483)	3/28/2002 4:42:01 PM
From: Crossy	Respond to of 95639

Michael, I think my last stance on MSCC was "buy below $15". I like it on current levels. In US semis I'd also choose EMKR, AXTI, MSCC, FCS and maybe CLTK and ANAD (the latter more fiberoptic related so more longterm). And yes, IIVI is also worth a look IMHO. They were ramping up Silicon-Carbide production. Personally, I would not get into CREE and RFMD - valuation problem, too high PSR ratio. Others say this is fine with them. For me it's a no-go. Actually I would consider cheap oversea's plays in compound semis too: Riber in France (7595.PA) or Sanken Electric or New Japan Radio in Japan.. rgrds CROSSY