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

To: Donald Wennerstrom who wrote (15138)	5/13/2004 2:53:33 PM
From: Return to Sender	Read Replies (1) \| Respond to of 95821

I did some charts on the TICK vs the SOX, SMH and NDX a while back: investorshub.com It's not one of my favorite indicators but like all other indicators that can be used as a contrarian indicator it is important to note that while at extremes a trend can change, even should change, that as long as the trend is still intact it needs to be respected. And what is the trend now? RtS

To: Donald Wennerstrom who wrote (15138)	5/13/2004 5:26:26 PM
From: Donald Wennerstrom	Respond to of 95821

Here is some support for 3 stocks posted today. <<Friedman, Billings, Ramsey & Co., Inc 5/13/2004 - JagNotes - Equity Analysis Inventory Concerns Overblown; Use Slow Summer Months to Accumulate Summary and Recomendation We believe current concerns over increased levels of inventories in 1Q04 are overblown. To the contrary, we believe all the ingredients are here to help prolong the length of the current cycle well into 2005, as evidenced by component shortages and a rational wafer capacity addition. Shortages, increased customer demand, and a seasonally stronger 2H04 should bode well for foundries, as that will help improve ASPs, while an increase in capex budgets should help with sequential equipment order growths later this year. We expect continued market volatility until there is increased confidence in 2005 estimates, but encourage investors to use the slow summer months to accumulate selectively. Our favorite names are AMAT, TSM and ASTSF. Key Points A prolonged cycle without the fear of over capacity. With 1Q04 earnings season over, some investors are concerned about the rising levels of inventories. We are therefore providing an analysis of inventories throughout the manufacturing food chain in order to help understand the underlying factors behind current levels of inventories. Rising inventories in 1Q04 are not necessarily such an evil thing. We note that the overall days of inventories have been in a declining trend since early 2001, so one quarter of increase does not necessarily mean excess capacity; rather, it implies a fear of prolonged shortages of components and a reluctance by manufacturers to add capacity at a faster pace. Our concern is focused on component shortages rather than an over capacity scenario. We expect an under-capacity situation until late 2005, as we believe chip unit volume will continue to increase at a faster pace than wafer capacity will be coming online. Yield improvements in 2H04 will help, but are not expected to hold back capex increases. Although some argue that yield improvements will help alleviate capacity shortages, we believe it will take longer than expected, with benefits not materializing until next year. Our top picks A combination of component shortages and increases in current capex budgets bode well for select companies under coverage. Our favorite names are Applied Materials(AMAT), Taiwan Semi(TSM), and ASE Test(ASTSF), all rated Outperform.