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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Paul V. who wrote (21057)	7/2/1998 1:21:00 PM
From: Teri Skogerboe	Respond to of 70976

Paul, Ramsey, All, Some bear and bull food... I'm remembering that Gus Richard (H&Q) downgraded AMAT and others in earlyish Jun '97, when the stock was about 60 - 63ish (pre-split). We've re-posted that info several times, because of the reasoning of the downgrade... old-time AMAT'ers will remember this. IMHO, WS relies on their clients and the public to have very short memories. And this continues to work for them (??)... And despite the early downgrades, he still made the All-Star list. geewiz, we should all be billionaires by now, if it's that's easy. I hope they never get in a tizzy over copyrighted info, because the thread makes a good "file cabinet". tls The Wall Street Journal 06/30 Semiconductors Copyright (c) 1998, Dow Jones & Company, Inc. Page R13 By Dean Takahashi Staff Reporter of The Wall Street Journal It wasn't easy being a chip picker last year. Semiconductor companies and their stocks got hit by excess production capacity in memory chips, slowing growth in personal-computer sales and broad price-cutting. The typical analyst chalked up a total return of just 9%. The trick was to find niches that were relatively immune from price-cutting. William Conroy of Sanders Morris Mundy in Houston took first place in the category, with an estimated 58% return by recommending such stocks as Burr Brown, a specialist in analog technology. Analog chips manipulate real-world signals, such as sound and images, into data; they also are relatively difficult to make, so competitors have a hard time persuading customers to swap out one company's product and plug in another that works the same. Mr. Conroy also was bullish last year on Texas Instruments, which was reducing its focus on memory chips in favor of digital signal processors that help convert analog data into computerized form. This year, Mr. Conroy says he is still recommending TI, though he is largely bearish on other tech stocks. The No. 2 stock picker in the category, with an estimated 45% return, was Gus Richard of Hambrecht & Quist in San Francisco. He made a similar bet with Analog Devices, another specialist in that chip technology. He also did well in the chip equipment-manufacturing business, first getting investors to bail out early in a downturn last year and then recommending equipment makers like Applied Materials and KLA-Tencor after their stock prices hit bottom. "I got bearish on the semiconductor capital-equipment group last summer as DRAM prices kept going down, some chip factories lost funding, and the banking situation in Korea deteriorated," he said. "I downgraded everything and then saw in October that the stocks were getting extremely cheap." Now, Mr. Richard is again favoring equipment makers on the theory that a recovery will soon take hold. He has buy recommendations on KLA-Tencor, Novellus and ATMI. Among the reasons for an expected turnaround: Asian chip makers have postponed roughly $23 billion in factory expansions, which could constrict chip supplies and bring an end to the interminable overcapacity in memories. Two-time All-Star Fred Wolf of Adams Harkness & Hill also rode chip-equipment swings, to an estimated 41% return. He got in early in the cycle by recommending companies in 1996, and last year timed the market well by issuing sell signs when valuations got frothy. For instance, he noted that Applied Materials was trading in the summer at 22 times year-ahead earnings, when historically it held steady at 15 times year-ahead earnings. His biggest single score was Asyst Technologies, in which he captured a 266% return. Mr. Wolf isn't recommending any of the chip-equipment companies at the moment. He not only doesn't see a turnaround this year, but he also isn't sure of the timing for a rebound next year either. "I think people have gotten too bullish about an upturn in 1999, which I don't see coming until the end of the year."