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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: matt dillabough who wrote (19278)	6/7/2006 9:33:51 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 25522

Three Picks In Semi Cap Equipment Maya Roney, 06.07.06, 9:01 AM ET It may go without saying, but if semiconductor capital equipment companies want to deliver strong share price performance, they will need to learn how to generate shareholder value, according to Morgan Stanley. "It is clear that investors have rewarded those companies delivering secular revenue growth through market share gains -- while cyclical revenue and earnings growth seem to have been largely ignored over the last six months," wrote analyst Timm Schulze-Melander in a report Tuesday. Based on data from Gartner Research and VLSI on market share trends in the semicap sector from 1997 to 2005, Schulze-Melander concluded that most large semicap companies are challenged to deliver secular growth. The analyst defines this as above-average growth through market share gains, usually generated because a company has dominated an enabling technology and converted it into share gains, revenue growth and earnings growth. In his coverage of the U.S. semiconductor capital equipment sector, Schulze-Melander has "overweight" ratings on Applied Materials (nasdaq: AMAT - news - people ), KLA-Tencor (nasdaq: KLAC - news - people ) and Teradyne (nyse: TER - news - people ), and an "attractive" view on industry. Applied Materials is the industry leader in many segments, and has delivered solid operating profit during the current up-cycle. The company declared a dividend for the first time in 2005, and it announced plans to return $4 billion to shareholders over three years, thus far primarily through stock buy-back activity. "These are small, albeit encouraging, steps towards improving margins and better balance sheet efficiency," said Schulze-Melander. KLA-Tencor is the market leader in wafer inspection, mask inspection, and thin film metrology, with 2005 market shares of 67.5%, 89.6%, and 37.2%, respectively. The company also enjoys among the highest margins in industry, according to the analyst. Schulze-Melander also expects Teradyne to perform well in 2006 and win back its former market leadership, given good momentum in the company's Flex and J750 system tester sales. "We think we are at the start of a gradual, sustainable recovery in order activity," said the analyst. "Consequently, we do not think that share prices will make new lows this cycle."

To: matt dillabough who wrote (19278)	6/7/2006 9:33:51 AM
From: Proud_Infidel	Respond to of 25522

Three Picks In Semi Cap Equipment Maya Roney, 06.07.06, 9:01 AM ET It may go without saying, but if semiconductor capital equipment companies want to deliver strong share price performance, they will need to learn how to generate shareholder value, according to Morgan Stanley. "It is clear that investors have rewarded those companies delivering secular revenue growth through market share gains -- while cyclical revenue and earnings growth seem to have been largely ignored over the last six months," wrote analyst Timm Schulze-Melander in a report Tuesday. Based on data from Gartner Research and VLSI on market share trends in the semicap sector from 1997 to 2005, Schulze-Melander concluded that most large semicap companies are challenged to deliver secular growth. The analyst defines this as above-average growth through market share gains, usually generated because a company has dominated an enabling technology and converted it into share gains, revenue growth and earnings growth. In his coverage of the U.S. semiconductor capital equipment sector, Schulze-Melander has "overweight" ratings on Applied Materials (nasdaq: AMAT - news - people ), KLA-Tencor (nasdaq: KLAC - news - people ) and Teradyne (nyse: TER - news - people ), and an "attractive" view on industry. Applied Materials is the industry leader in many segments, and has delivered solid operating profit during the current up-cycle. The company declared a dividend for the first time in 2005, and it announced plans to return $4 billion to shareholders over three years, thus far primarily through stock buy-back activity. "These are small, albeit encouraging, steps towards improving margins and better balance sheet efficiency," said Schulze-Melander. KLA-Tencor is the market leader in wafer inspection, mask inspection, and thin film metrology, with 2005 market shares of 67.5%, 89.6%, and 37.2%, respectively. The company also enjoys among the highest margins in industry, according to the analyst. Schulze-Melander also expects Teradyne to perform well in 2006 and win back its former market leadership, given good momentum in the company's Flex and J750 system tester sales. "We think we are at the start of a gradual, sustainable recovery in order activity," said the analyst. "Consequently, we do not think that share prices will make new lows this cycle."