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

To: Donald Wennerstrom who wrote (52681)	7/9/2011 12:30:21 PM
From: Donald Wennerstrom	1 Recommendation Read Replies (2) \| Respond to of 95617

To go along with the chart just posted, this is a tabular look at the same period showing the divergence of the "semis" performance compared to the major indices for the period since 2/18/11. The peak value for the SOX occurred on 2/17 as shown in the chart, but the table is based on Friday's values 1 day later. Ignoring NSM as its value is determined by the TXN buyout offer, there are only 4 stocks with positive gains over the period. Eight of the stocks are down over 20 percent. Note the 2 columns showing next year earnings estimates and PE values. The earnings estimates are positive for all stocks, but the numbers for PE values vary over a large range. The stocks in the top part of the table have quite high PE values compared to those stocks in the bottom part of the table. Why is there such a difference in evaluation? Those stocks in the bottom part of the table have been obviously out of favor driving their PEs to the 9 area, while those in the top part have been relatively untouched with PEs in double digits. Look at LRCX with an earnings estimate of 5.09 and a PE of 9, losing 21.3 percent in value. CREE and WFR both look out of place. Their present prices are 32.23 and 8.04 yet their earnings estimates are 1.60 and 1.42, only 0.18 difference. CREE's PE of 20 looks wildly out of place in this table. So does WFR's PE of 6. SNDK is another stock with a great earnings estimate of 4.84, 2nd highest in the table, yet the stock has lost 16.2 percent. MU has lost 34.4 percent to push its PE down to 9 where 5 other stocks have the same PE value. There are many other anomalies in this table with no satisfactory answers except that Mr Market has decided in its "wisdom" that the semi area just doesn't "have what it takes" compared to the major indices.