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

To: scott_jiminez who wrote (3528)	6/16/2002 2:02:57 PM
From: Donald Wennerstrom	Read Replies (1) \| Respond to of 95541

Scott, I share your frustration in finding some indicators that make sense in evaluating the "goodness" of a particular stock or category of stocks. Several years ago I kept track of more parameters in tabular form such as price to sales ratio, book value, etc, but I have essentially eliminated that effort in the last 2 to 3 years. Now I only keep on a weekly basis the data on PE and PEG for reference. PE and PEG is only one measure of a stock, but it is the only one I am tracking right now. One of the problems with these ratios is due to the very large swings in earnings, sales, etc over 1 to 3 year periods. This causes equally large changes in the performance parameters. Then depending on how far(or near) the market wants to project forward, a present day price range for the stock is assigned. Many people on these threads have noted the "excess valuation" of the semi-equips(and other stocks as well) during this down cycle compared to past down cycles. I have kept enough records to know that this is certainly true. During the 1998 down cycle, all ratios, PEG, P/S, etc were much lower than they are today. That fact allowed gains of over 1000 percent for many stocks during the period from October 1998, when the market turned, to the peak set in the spring of 2000. When the market turns this time and starts upward, the gains will not be as great as the previous cycle because the present valuation ratios are not anywhere near as low as the prior period. Your data on P/S for the stocks is very useful. If you are so inclined, please post the data on a periodic schedule. The more information we can document, the better we can make sense of what is going on in the market. Don