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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (23863)	2/17/2005 10:55:51 PM
From: ild	Read Replies (1) \| Respond to of 116555

YES. THE BOTTOM IS IN! From very respected ANALyst: January BTB - What We Already Knew January Book to Bill of 0.80 was down significantly from December’s 0.94, driven by a sharp decline in front-end (FE) orders, as expected. FE orders -20%M/M and -29% Q/Q, or slightly better than AMAT’s -36% Q/Q two days ago - expected given AMAT’s heavy dependence on foundries which are placing very few orders (but forecasts are firming for late CQ2:05). Back-end (BE) orders still bouncing along the bottom, but growing again as % of total - historically well correlated to forward 6-month stock performance. Buy equipment stocks now - short tool manufacturing cycle times better enabling chipmakers to manage higher trough capacity utilization + enabling equipment companies to generate far more cash than prior cycles despite big downward pressure on capex from 300mm. With capex:sales now expanding again, equipment companies set to outgrow chip companies and post premium growth in free cash flow, thus supporting valuation. Favor AMAT/LRCX.