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: Donald Wennerstrom who wrote (3524)	6/15/2002 4:55:43 PM
From: Donald Wennerstrom	Read Replies (1) \| Respond to of 95541

Here is the weekly data for the SOX. 6/7/02 6/14/02 FST CALL NEXT FST CALL CLOSE CLOSE PERCENT NXT YR YEAR LNG TRM SYMBOL PRICE PRICE CHANGE EARN PE GROWTH PEG MOT 14.82 15.60 5 0.44 35 15 2.36 MU 22.15 22.30 1 1.79 12 20 0.62 MXIM 43.07 43.12 0 1.05 41 25 1.64 ALTR 16.70 16.62 0 0.50 33 28 1.19 TER* 26.08 25.86 -1 0.56 46 20 2.27 NSM 30.93 30.45 -2 1.49 20 18 1.14 KLAC* 49.39 48.45 -2 1.43 34 25 1.36 AMD 9.81 9.60 -2 0.52 18 15 1.23 INTC 22.00 21.28 -3 0.89 24 18 1.33 TXN 26.40 25.40 -4 0.81 31 20 1.57 AMAT* 20.62 19.83 -4 0.76 26 22 1.21 LLTC 35.21 33.75 -4 0.85 40 25 1.59 XLNX 30.49 28.40 -7 0.95 30 25 1.20 BRCM 21.23 19.56 -8 0.52 38 40 0.94 LSCC 9.57 8.68 -9 0.43 20 25 0.81 LSI 10.31 9.32 -10 0.46 20 20 1.01 NVLS* 40.00 35.97 -10 1.54 23 25 0.93 TOTALS 428.78 414.19 -3 14.99 28 SOX-X 441.01 426.00 -3 COMPQX1535.48 1504.74 -2 *In Semi-Equip Group

To: Donald Wennerstrom who wrote (3524)	6/16/2002 8:19:34 AM
From: scott_jiminez	Read Replies (1) \| Respond to of 95541

Don... I continue to have a big problem making sense out of any number associated with 'earnings' (PE, PEG, etc.) in the equipment sector. In addition to the fact that so few companies are currently reporting 'earnings' (only 7 of 36 stocks in my semi-equip universe - see below), the ability to predict growth/future earnings is, IMO, virtually nil due to the ongoing devastating lack of demand in the IC sector. I remain an advocate of the price/sales ratio as a more accurate and sensitive indicator of valuation. For example, while less than 20% of equip. companies can generate a current PE number, ALL companies have a p/s. Below is a ranking of equipment stocks based on Yahoo's p/s number. Stock P/S PE TGAL 0.62 n/a WFR 0.84 n/a SFAM 0.96 n/a ATRM 1.07 n/a FSII 1.15 n/a ADEX 1.19 n/a KLIC 1.31 n/a EMKR 1.33 n/a MTSN 1.35 n/a GGNS 1.43 n/a ASMI 1.57 154 PLAB 1.68 77 DPMI 1.69 n/a VECO 1.80 n/a BRKS 1.89 n/a REAL 2.14 n/a SMTL 2.17 n/a LRCX 2.19 n/a UTEK 3.11 n/a ASYT 3.18 n/a COHU 3.29 n/a ATMI 3.86 n/a ASML 4.08 25 TER 4.30 n/a NANO 4.35 n/a EGLS 4.75 n/a LTXX 4.78 n/a KLAC 4.93 32 CYMI 5.14 333 NVLS 5.19 83 CMOS 5.41 n/a CREE 5.65 n/a HELX 6.48 n/a AMAT 6.71 2038 PHTN 9.71 n/a IBIS 10.44 n/a There is clearly a very wide dispersion of valuations in this sector. However, the mean p/s for the group, 3.36, remains far to high for this stage of this 'recovery'. In fact, the average p/s of some of the largest-cap stocks (AMAT, NVLS, KLAC, TER) is 5.28. This is stratospheric; the likelihood that the valuations of these leading stocks will be brought down over the next couple months is, IMO, very high…and this process will drag the rest of the sector with it. A major caveat here is that there is hardly any correlation between your data on performance over the past 4 weeks and p/s: while SFAM, the stock with the 3rd lowest p/s was the best performer over the past month, TGAL, the stock with the absolute lowest p/s was one of the worst performers. And UTEK, the 2nd best stock performer, has a p/s (3.11) that's neither high nor low relative to the group. As usual, go figure. Best regards, Scott.