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

To: Gemini who wrote (7762)	11/1/1997 8:37:00 PM
From: JRGEE	Read Replies (1) \| Respond to of 25960

For discussion.I do not know the bottom on Cymer but I will retire on this stock when it comes back and it will. The upside is going to be like the rocket ship going to the moon. FROM LEHMAN BROS: Headline: ASM LITHOGRAPHY: Shares Attractive; Fundamentals Strong Author: Paul Brandeis 44-171-260-2535 Company: ASMLF Country: COM CNE Industry: ELECTS Ticker: ASMLF Rank (Prev.) : 1-Buy Rank (Cur.) : 1-Buy Price : 151 (NLG) 52wk Range : 60-211 Todays Date : 10/29/97 Exchange Rate : 1.9876 Fiscal Year : DECEMBER ADR Ratio : 1 for 1 ADR Price : 76.98 52wk ADR Range : 35.21-105.55 ------------------------------------------------------------------------------ Net Inc. Dividend N Yld CFPS EPS EPSADR P/E P/CF (NLGM) (NLG) (%) (NLG) (NLG) ($) 1996 A 217.70 0.00 0.0 3.48 3.18 1.88 1997 E Pre 295.20 0.00 0.0 4.69 4.28 2.23 1997 E Cur 295.20 0.00 0.0 4.69 4.28 2.23 35.3 32.2 1998 E Pre 504.70 0.00 0.0 7.73 7.30 4.06 1998 E Cur 504.70 0.00 0.0 7.73 7.30 4.06 20.7 19.5 Market Capitalisation : 4821 (NLGM) Shares Outstanding : 69.0 (M) Stock Ex. Listing : NASDAQ Am'dam Price (As of 10/27 ) : 153 (NLG) Index : CBSK Value : 590.80 Disclosure(s) : Exchange Rate per $ : 1996A 1.69 1997E 1.94 1998E 1.84 Book Value Per Share: 9.41 Price\Book : 16.26 ------------------------------------------------------------------------------ * ASML shares have corrected more over the recent trading sessions then... * ...they did in the last recession (95-96 time period). * Fundamentals remain strong w/ the move to 0.25 micron processing equipment. * Full recovery not likely until markets settle. Shares attractive... * with good value. ------------------------------------------------------------------------------ DON'T DISTRIBUTE TO RETAIL CLIENTS BEFORE CHECKING STATE BLUE SKY RESTRICTIONS ------------------------------------------------------------------------------ As a result of heavy exposure to Asia, semiconductor equipment stocks and particularly ASM Lithography (down 35%), have been hit heavily by over recent sessions. On stock screens searching for Asian exposure, semiconductor production equipment shares are prominent. (30-35% of ASML revenues come from Asia.) As a result, they are sensitive to market declines motivated by developments in Asia. Our discussions with Asian chip manufacturers suggest that fears of sharp cutbacks in capital investment are probably overdone. Most companies plan to maintain their budgets, and a few may even benefit from translation gains. Asian chip manufacturers are generally forging ahead with plans for capital investment. More than 75% of the dollar volume of chips produced by Asian chip companies (excluding those in Japan) are exported outside of Asia (excluding Japan). And a large portion of the chips used locally go into electronic equipment that is ultimately exported. Therefore, the fortunes of chip manufacturers in South Korea and Taiwan are not closely tied to local electronics consumption in the Pacific Rim. They are linked to the global economy. Most of the Asian chip manufacturers we have talked to have indicated that they do not plan to reduce their 1998 semiconductor capital budgets as a result of the currency swing. LG Semiconductor (not currently an ASML customer) is the only Asian semiconductor company that has revised its budget projection to flat for 1998, compared to an earlier estimate of a very modest increase (this is due to the higher interest costs associated with dollar denominated debt). Factors that caused the last recession are not present. The semiconductor equipment business has recently just emerged from the 1996-1997 recession.The factors that led to that recession, including excess chip inventory and excessive semiconductor capital spending in the preceding years, are not present today. The recession had the effect of wringing a lot of excess out of the system. While excess capacity in older memories continues to linger, there are few complaints of low overall chip capacity utilization, and there are some areas where capacity is in short supply. The shares are down. We did an analysis to determine how much the semiconductor equipment shares have come down from their recent high points, compared to the drop that occurred from the Summer of 1995 through the Summer of 1996 (as a precursor to the 1996-1997 industry downturn). The shares price declines so far are not as dramatic, on average (excluding ASML), as the ones in the mid 1995-mid 1996 time frame. But in many cases, equipment stocks have already experienced half to two thirds of the percentage decline that they did at the outset of the downturn. Since the 1995-1996 decline was arguably an overreaction, this suggests that the steep recent slide in equipment stocks may have limited duration from here. Recent Prev. Recession Decline Decline ASM Lithography 35.2% 38.4% Applied Materials 42.6% 59.8% Etec Systems 38.2 44.1 Electroglas 48.1 69.0 KLA-Tencor 38.5 61.5 Kulicke & Soffa 56.3 79.2 Novellus 33.1 58.4 PRI Automation 42.7 56.4 SpeedFam 36.9 48.9 Silicon Valley Group 37.7 66.8 Teradyne 38.3 69.4 A recovery in semiconductor equipment stocks and ASML will probably have to wait until the overall market settles. However, we think ASML shares are attractive and offer outstanding value. The company continues to experience strong momentum as semiconductor manufacturers accelerate their plans for 0.25 micron and below processing and believe that the company is currently gaining market due to its industry leading productivity. Moreover, earnings estimates for the 98-99 time frame are likely to exceed current estimates.