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

To: Return to Sender who wrote (10983)	8/14/2003 6:00:02 PM
From: Return to Sender	Respond to of 95748

Semiconductors . . . SoundView Technology Group upped Texas Instruments to an "outperform" rating from a "neutral" on belief the chip company is the "best proxy for the semiconductor industry, [which] is in the process of a mild/gradual recovery." Texas Instruments upped to Outperform from Neutral. Firm is more bullish on the semiconductor sector this morning based on broad based recovery themes seen at firm's semiconductor conference yesterday. SoundView now believes that semiconductor investors looking into 2004 have a favorable risk/reward profile and that the semiconductor sector will Outperform the broader market. Firm views TXN as the best proxy for a semiconductor industry that is in the process of the mild/gradual recovery. Firm raises price target to $24 from $18. SoundView is more bullish on the semiconductor sector this morning based on broad based recovery themes seen at its semiconductor conference yesterday. Firm now believe that semiconductor investors looking into 2004 have a favorable risk/reward profile and we believe the semiconductor sector will Outperform the broader market. Surprisingly bullish in firm's coverage area were Micron, Intel and LSI. Notes that much of the bullishness comes from the companies that have PC and/or consumer seasonal momentum, but nonetheless, more positive body language than firm had expected. Also indicates that wireless commentary was consistently optimistic regarding 2nd half improvement, with positive wireless commentary from Micrel, Sawtek and National Semi. ATI Technologies announced a agreement with Microsoft to develop custom graphics technologies for use in Microsoft's XBox game console. "This agreement cements ATI's position as the prime graphics supplier for the future of the games industry," said ATI chairman K.Y. Ho. ATI is developing custom, leading-edge graphics technologies for use in future Xbox products and services. "We selected ATI after reviewing the top graphics technologies in development and determining that ATI's technical vision fits perfectly with the future direction of Xbox," commented Microsoft's SVP of the Home and Entertainment Division. Merrill Lynch is resuming coverage of four communications semiconductor names. Firm resumes Broadcom and PMC Siera with Sell ratings and Marvell and Agere with Neutrals. With respect to PMCS, firm notes that stock is trading at an EV/Sales ratio of 5.7x, which is about a 40% premium to its peers. Firm's ROOC analysis suggests a mid cycle theoretical fair value of $7.62 and a recovery scenario fair value of $9.30. On BRCM, firm believes co will lose significant market share in server chips in 2H04 due to delays in new product introduction. Believes multiple of 44x 2004 earnings is unwarranted given the declining growth prospects and competitive issues. Firm's ROOC model suggests a mid cycle theoretical fair value of $14. Boxmakers . . . Gartner, research and advisory firm, said it has given a slight boost to its third-quarter outlook for worldwide personal computer shipments to 39.8 million units. This performance would represent an increase of 9.6 percent from the same period a year earlier. For the year, Gartner sees global shipments of 161.3 million units, up 8.9 percent from 2002. However, the company said it remains cautious about the PC market long-term. "A sustained PC market recovery requires a return to business IT (information technology) spending, which, in turn, is dependant on a significant improvement in economic conditions," said George Shiffler, principal analyst for Gartner's computing platforms and economics research. "Despite some recent encouraging signs, economists are still guarded in their outlook for the second half of the year, so the prospects for a significant business PC recovery by year end remain questionable." Gurus . . . CS First Boston chief U.S. investment officer Paddy Jilek lowered his weighting on the technology sector to "market weight" from "overweight" due to recent rise in long-term interest rates and to greater embedded optimism in market expectations. Jilek said that while capital expenditure growth in the technology sector is accelerating, he feels technology stocks are feeling the weight of rising rates more than any other sector given that most tech companies "are inherently long duration assets." Jilek added that the market is "now valuing technology stocks accordingly" given growing evidence of a cyclical recovery in capex. Notes that tech stocks are especially sensitive to discount rate changes given their heavy dependence on assumed "terminal value." Merrill Lynch technical analyst Steven Miley said the stock market remains "very much trapped" within recent consolidation ranges, but continues to believe that the "directional risk" is to the upside. He said Wednesday's pullback was likely just a "fatigued reaction" to the five consecutive gains posted by the Dow industrials and the S&P 500 Index. He expects both indexes will move above the 2003 recovery highs of 9,361 and 1,015, respectively. RobBlack.com MarketWrap robblack.com

To: Return to Sender who wrote (10983)	8/14/2003 6:33:47 PM
From: Donald Wennerstrom	Respond to of 95748

RtS, Thanks for the response. My previous post was an attempt at a little "tongue in cheek" humor. But being serious for a moment, I agree with your thoughts. You do a lot of work on market analysis which you unselfishly share with different threads including this one, and I always like to read your comments and analysis. I agree with your outlook for the market now, I think we should have a contraction as well, but we have a lot of forces working on keeping the market going upward. Now let me contradict you with a little attempt at humorously taking the other side again. May I remind you, IBD says <Leading stocks are finding support at their 50-day lines, a favorite place for mutual funds and other institutional investors to step in and buy.> You see, we have the perfect setup -we'll just follow the charts, and when our favorite stocks bottom on the 50 day moving average, we step in and buy just like the "big boys and girls". Then we just ride the wave until it peaks, then sell, and then wait for it to bottom again on the 50 day moving average and we repeat. Sounds like a fool proof way to make money to me. You know, somebody told me once as I was getting into the market that I should buy at the bottom and sell at the top. And the secret is of course - we can follow IBD's advice and when they turn bearish it will be easy to see. They will come up with all sorts of reasons why now is not a good time to buy and then we get out. Another great way to tell of course is when good news is evaluated as "bad news" by the market. The first time one of the evaluation indicators goes positive - like say if employment drops from 5.8 to 5.7 percent and the market goes down(NASDAQ drops 20 points) then we know we are in trouble and we had better bail out. I remember back in 2001 when ASYT gave one of their quarterly reports. They reported record sales, earnings and profits. The next day the stock went down about 15 percent. Given that kind of performance the message is - go short, or get out of the market. I think we can handle that!:) Don