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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: D.J.Smyth who wrote (7376)	10/30/1997 6:36:00 PM
From: John Bloxom	Read Replies (1) \| Respond to of 25960

Too much is being made of the price thing here, IMHO. You have to ask yourself the question: if tomorrow the stock trades back to $35, would you sell? If not, should you really care whether it goes to $35? Isn't a fall to $20 more attractive since it presents an opportunity to accumulate more? The trader at my NY account, who has been trading since the beginning of time, says that this stock is dead money until January. He cites as the reason the fact that we are entering tax loss season. There are two waves: November (for those who want to sell and buy back) and December (for those who want to sell only). With the issue so far off its highs, he reasons that there will be substantial tax loss selling, that the shorts know it, and that they therefore will have many opportunities to cover. So until January, absent introduction of something unexpected, he figures the stock trades somewhere around here. After January, he figures the stock very promptly goes through its old highs to set new records. One other thing: if the Oberweis $2.50 estimate is accurate, it would suggest a 1998 52 week high of $130.00 per share (utilizing a retrospective high p/e valuation model, or a 1.3 x 5 year growth forward multiple model, whichever you prefer). In this connection I note that $2.50 p/s seems consistent with management's view that 1998 is a @700 units shipped year as opposed to M/S' @350 unit view. That is, if @350 units shipped is worth $1.10 or so p/s, then @700 units shipped would equate to $2.20 p/s, straight-line, before allowing for decreases in per-unit cost of production as a result of having more units over which to spread fixed and variable, but relatively inelastic, costs. A $.30 p/s benefit in decreased per unit cost at 700 units shipped seems reasonable. Thus, the Oberweis estimate seems reasonable and consistent with the guidance that management has provided. I don't think I've ever seen an opportunity in the market as good as this one. Honest. I have added shares once again. Regards, John