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

To: The Ox who wrote (12825)	12/26/2003 6:39:25 PM
From: michael97123	Read Replies (1) \| Respond to of 95406

Mike, So the zev,rts, mikeh scenario has a return to recession by end 2004/early 2005. No way for the powers to be to avoid the business cycle coming on so quickly with a recession?? mike

To: The Ox who wrote (12825)	12/27/2003 4:08:58 PM
From: Return to Sender	Read Replies (1) \| Respond to of 95406

From Briefing.com: Trading and volume was extremely light on Friday. There was no material news to drive trading. The Briefing.com Tech Index finished the session up 0.6% vs. a 0.2% gain for the Nasdaq Composite (IXIC 1973.14 +3.91). Advancers led decliners 1.3:1 with advancers gaining 1.7% and decliners losing 1.7%. The Philadelphia Semiconductor Index (SOXX 498.69 +0.67) edged higher by 0.1% with advancers outnumbering decliners 2.0:1; advancers rose 0.6% and decliners eased 0.5%. amazon.com (AMZN 53.47 +0.15) announced it closed the busiest holiday season in the company's history, completing a record 2.1MM orders worldwide in a single day. As noted in the Q3 review (Oct 22) on the Story Stocks page, we think that: AMZN has an A-management team shaping a vast market opportunity; The company is capturing mindshare; this conversion process is a methodical process as people become familiar with the amazon value proposition of selection, convenience, quality and value, and will translate into repeat and higher revenue over time. AMZN management is taking a rational approach to new product / category introduction, focusing on optimizing cash flow and return on existing businesses rather than pure top-line growth. As a result, the company's reported year-over-year growth rate understates the scalability of the business, particularly the International sites. We think AMZN can readily achieve high 20% and even low 30% top-line growth well into the next decade. Gross margin is constrained by the nature of the business but the leverage within amazon's centralized distribution business model suggests amazon will be able to achieve margin expansion on the SG&A level. Looking ahead, there are no earnings reports scheduled until the first full week in January (01/05). See the Earnings Calendar for scheduled earnings releases.Trading is likely to remain thin and volatile into the new year. We remain moderately bullish on technology shares over the long-term and would take advantage of the volatility to buy into quality, attractively priced names / sell richly priced shares into strength as part of a rebalancing of the tech portion of the portfolio to a neutral market weight (Please visit the Story Stocks page for the latest thinking on investment opportunities across market sectors, including tech).--Ping Yu, Briefing.com Group % Change Avg % Change Advancers Avg % Change Decliners Ratio Advancers to Decliners P/SG Ratio: Advancers P/SG Ratio: Decliners Philadelphia Semiconductor Index +0.1% 0.6% -0.5% 2.0:1 3.6 5.4 Briefing.com Tech Index(based on a composite of over 1000 tech companies) +0.6% 2.2% -1.4% 1.3:1 1.7 1.7 Audio & Video Equipment +0.2% 1.4% -0.6% 0.8:1 0.4 0.4 Communications Equipment +0.7% 2.6% -1.6% 0.7:1 2.0 1.6 Communications Services +0.4% 2.2% -1.4% 1.0:1 1.0 1.1 Computer Services +1.1% 2.8% -1.3% 1.6:1 1.8 1.9 Computer Sys & Peripherals +0.5% 1.9% -1.5% 1.5:1 1.7 1.1 Electronic Instruments & Controls +0.4% 1.8% -1.4% 1.4:1 1.3 1.2 Scientific & Technical Instruments +1.0% 2.9% -1.7% 1.6:1 1.6 1.2 Semiconductors +0.5% 1.9% -1.4% 1.4:1 2.5 3.0 Software & Programming +0.4% 2.2% -1.6% 1.2:1 1.8 1.7 9:39AM California Amplifier (CAMP) 14.00: After the close on Tuesday, California Amplifier published Q3 EPS of $0.22 on revenue of $44.248MM (+84.6% Y/Y), ahead of revised guidance of $0.13-0.17 on $41-44MM. Guided for Q4 EPS of $0.18-0.24 on revenue of $40-48MM. Wide range reflects management uncertainty over industry-wide materials shortages. Performance P&L Line Performance Revenue Revenue rose 84.6% Y/Y, aided by higher average selling prices on increased market demand for CAMP's latest generation of satellite television products. Gross Margin Gross profit improved Y/Y from $4.378MM to $6.734MM. Gross margin declined 310 bps Y/Y as a materials shortage contributed to manufacturing inefficiencies. Operating Margin Operating income improved Y/Y from $1.616 to $3.844MM. Operating margin improved 200 bps Y/Y to 8.7% as management kept expenses in check and reined in R&D, offsetting decline in gross margin. SG&A as a percent of sales improved 220 bps Y/Y to 3.5%. R&D decreased marginally in absolute terms and improved as a percent of sales by 280 bps Y/Y to 3.0%. Valuation On an inverted DCF/EVA basis, assuming steady Y/Y improvement to 20% operating margin by F06, CAMP's valuation implies that the company must grow revenue in the high teens each year for the eight years beginning in F06 in order for investors to justify owning shares at current valuation. Consensus Y/Y growth for F04 and F05 is 19.6% and 5.9% respectively. On a price multiples basis, CAMP trades at 1.7x F04 revenue of $119.65MM (+19.6% Y/Y) and 1.6x F05 revenue of $126.65MM (+5.9% Y/Y); 56.0x F04 EPS of $0.25 and 34.1x F05 EPS of $0.41. Summary Strength within core satellite television business and aggressive expense management is encouraging; offsets concerns over near-term supply chain problems. We would look for management to secure the supply chain over the coming quarters so as to minimize impact on manufacturing operations. As a result, look for gross and operating margin to continue to improve over the coming quarters. Shares are attractively priced relative to the sizeable target market opportunities. Would initiate minor position and add on pullbacks. Company is an investment in satellite/direct broadcasting and Wi-Fi (wireless hi-speed Internet), attractive global emerging opportunities that support sustained double-digit growth beyond the high teens rate implied by our model given CAMP's small size. Management is diversifying CAMP's business beyond satellite television and MMDS video and broadband data solutions to Wi-Fi access solutions. Vytek acquisition strengthens CAMP's position within the Wi-Fi market; complements CAMP's adaptive digital beam-forming smart antenna technology which addresses many of the changes to the widespread deployment of Wi-Fi, including range, and data interference and throughput.--Ping Yu, Briefing.com Broadcom (BRCM) 34.36 +0.14 : 802.11g WLAN chip supply to stay tight through 1Q -- DigiTimes (BRCM) 34.22: DigiTimes reports that ongoing strong sales of WLAN products and tight chip testing capacity will extend the 802.11g chip shortage through the first quarter of 2004, according to sources. The chip shortage began early this quarter, causing Taiwanese network equipment makers to be unable to meet orders, said equipment maker sources. Rising shipments of notebooks with built-in 802.11g chips has led to increasing urgent orders at IC design houses, explained Frank Chen, Broadcom's country manager for Taiwan. However, normal orders will not be affected by the shortage, he added. Chen also projected that tight testing capacity would be relieved after mid-January. finance.yahoo.com