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Technology Stocks : Speedfam [SFAM] Lovers Unite ! -- Ignore unavailable to you. Want to Upgrade?

To: H James Morris who wrote (2715)	2/7/1998 8:40:00 PM
From: Steve Patterson	Read Replies (3) \| Respond to of 3736

"So why isn't SFAM getting killed after the shortfall announcement?" This bad news has already been anticipated in their fall from $60 to $25. If everyone thought they were going to make the First Call numbers going forward they would trade well above where they are now. I am actually more scared by the possibility of AMAT taking market share from SFAM than by market conditions in general. CMP (as I understand it) is mandatory technology for more and more types of semiconductors, and unless you forecast a collapse in worldwide demand for DRAM and processors, whether they are made in Korea, Taiwan, Dresden, or Idaho makes little difference. Let's also not forget that SFAM is not a pure play on CMP -- they have substantial exposure to the hard disk business. Here the problem is overcapacity, not a currency meltdown in the country of origin. Simultaneous slowdowns in both core sectors of a business are very likely to impact its bottom line. However, please note that this downturn has caused only flat revenue quarter-to-quarter -- which is a measure of both SFAM's competitive strength and the continuing demand for cutting-edge semiconductor and storage technology. How many other semi equipment companies are even consistently profitable? However, all this optimism is predicated on a resumption of growth sometime during 1998. As SFAM burns through their cash position, their book value will decrease, which means a continuing downhill slide unless profits can justify an earnings-based valuation again. I know which way I have bet, but there are reasonable counterarguments. In times like this it is comforting to know that company management owns a large stake. Long, Steve

To: H James Morris who wrote (2715)	2/8/1998 2:05:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 3736

Re:but when I see the amateurs on Si posting bullshit like 'I hope this stock goes down so I can buy some more' scares the hell out of me. Many of these so-called "amateurs" have done very well for themselves; 60%+ per year is not out of the ordinary. In aggregate, I value their opinions much more than the analysts. These people have real $$ riding on the decisions they make. The analysts get their million $$ bonus regardless of their perfromance and it shows in the averages of the mutual funds. The epq mfg's, who average 30% of their revenues from this region will get killed if Asia deteriorates What is important is not really what happens to asia, rather what happens to the overall demand for IC's. Since Asia(ex Japan) accounts for only 22% of chip consumption, my guess is that any capacity not used by the Koreans will be exploited by American or European cos. BK