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

To: David Kuspa who wrote (3092)	7/3/1998 5:13:00 PM
From: Steve Patterson	Read Replies (1) \| Respond to of 3736

I bailed out of Speedfam earlier in the week, before the quarterly announcement. This action was the result of lots of thought and internal debate (after all, I did sell at a loss). Here are several of my reasons: 1) It took the market nearly a year to pay $19/share even when their business was growing at 40%+ and a P/E of about 12. Why are they worth that much while losing money? 2) With world semiconductor demand decreasing, it doesn't matter how critical CMP is to new generations of technology. TSMC not at capacity...yuck. Nothing to drive DRAM demand until, maybe, NT 5.0...yuck. 3) SFAM's situation getting worse between the preannouncement and the announcement...double yuck. 4) Bad trend vs. Applied; it doesn't matter if Applied is giving Mirras away, making the comparison unfair; all is fair in business and war, and Applied is famous for their aggressive ways of doing business. 5) If SFAM has such a huge CMP backlog, why could they only ship ~3 machines this quarter? Those orders must not be very solid...triple yuck. I am looking at the hard drive market, which still hasn't bottomed out, and which is still not (to me) a good investment, and which has suckered any number of people into guessing at the bottom. In my opinion, the bottom in semis is further out than for drives, and almost everyone will have given up altogether by that time. Look at KMAG, for example, trading at 0.5x book, and falling... Once everyone capitulates, no one will return until the rising earnings curve makes it mandatory, and smart people will be able to pick the winners just as they picked SFAM in this cycle. Perhaps SFAM will participate again, but I'll evaluate the situation then. Until then I will move my money elsewhere. Of course, I could be wrong; after all, I made the wrong decision to buy when I did. No longer long (but still following the discussion), Steve