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To: Andrew Vance who wrote (13161)	4/4/1998 7:57:00 PM
From: jerryf	Respond to of 17305

Thanks AV. , 2nd thoughts are always welcome

To: Andrew Vance who wrote (13161)	4/4/1998 7:59:00 PM
From: Andrew Vance	Respond to of 17305

AV--In private email I was asked to check out some other people's perspective of the tech sector. I found it very interesting. However, I also came across this which I think may be of interest. Andrew TALKING POINT/KLA-Tencor insiders Reuters Story - April 03, 1998 09:52 By Daniel Bases NEW YORK, April 3 (Reuters) - Patience may pay off for insiders at KLA-Tencor Corp. who have held onto or increased their stock positions since late last year, as analysts see a turnaround for the semiconductor-equipment manufacturing industry. According to the latest information from CDA/Investnet, a database that tracks stock sales and purchases by corporate insiders, several KLA executives boosted their stakes in the company by exercising options last November. "While there have been no insider filings for KLA-Tencor since November, this lack of activity adds significance to options exercises that occurred late last fall," said Bob Gabele, president of the Ft. Lauderdale, Fla.-based CDA/Investnet. "These insiders are behaving like something very good is going on -- a very contrarian look to it," Gabele said. KLA shares fell 9/16 to 40-1/2 in Nasdaq trading Thursday in what analysts saw as profit-taking. The stock rose 2-13/16 on Wednesday despite a third quarter earnings warning caused primarily by damage from Asian financial turmoil. The shares were off 1/4 at 40-1/4 in early trading Friday. San Jose, Calif.-based KLA predicted a 17 percent fall in third quarter revenues to $270 million, below analysts' estimates. Analysts agree investors are looking at KLA as a barometer for an industry that is extremely sensitive to changes in supply and demand. BT Alex Brown analyst Byron Walker described the recent rise in KLA's stock price as indicative of "investors not wanting to miss a historic stock appreciation when this cycle turns." "This is the dawn of a new cycle," said Hambrecht & Quist analyst Gus Richard. According to Gabele, four KLA insiders, including Chief Executive Officer Jon Tompkins, exercised options on 35,549 shares, incorporating them into their underlying stock positions, between October 30 and November 20 last year. The options would not have expired until at least 2001. Outside director Leo Chamberlain exercised non-qualified options for 12,112 shares, incurring a tax liability, but did not sell the shares, according to CDA/Investnet. The lack of recent insider activity may be due to the combination of available windows to sell and KLA's recent purchase of privately held Amray Inc, a maker of scanning electron microscope systems. "We have relatively narrow windows of trading for executives and we generally prohibit trades around any kind of deals, and as you know we recently made a deal with Amray," said Roberta Emerson, vice president of corporate communications at KLA. KLA's rising share price "tells me that (investors) feel the cuts in (earnings) estimates are over," said Richard. Concern over the Asian crisis hurt semiconductor-equipment makers' shares, but "now it appears that things have settled there and ... investors are giving the group the benefit of the doubt," said Needham & Co analyst Leonard Sanders. Sanders has a hold rating on KLA because "fundamentals do not look like they are getting better yet." "I think the stock, at something like 25 times my next year's number, is a bit expensive if you have a short-term time horizon," he said. Sanders cut his KLA earnings-per-share estimates by $0.10, to $0.33, for both the third and fourth quarters. Richard cut his third quarter estimate to $0.34 a share from $0.41. For the fourth quarter, his estimate is $0.33 a share. "I think my numbers are low. I think they are going to be easily attained by the company," Richard said. "I think that the current cuts are such that supply and demand are going to come back into balance at the end of the year, maybe the beginning of next, and profitability will follow, and I don't think it gets much worse."