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Technology Stocks : FSII - The Worst is Over? -- Ignore unavailable to you. Want to Upgrade?

To: Mark Adams who wrote (2264)	10/4/1998 12:36:00 AM
From: Donald Wennerstrom	Respond to of 2754

Since the middle of last year, earnings estimates have been decreasing for nearly all of the semi-equip stocks, some of course, much more than others. The following group of 41 stocks, shown in tabular form below, list the latest earnings estimate for the current year and next year. The estimates are those of First Call, current as of this weekend. Based on Friday's closing price, the PE for next year is calculated in the last column for each stock. The table is sorted by current year earnings estimate. The top stock in the table is ETEC. Compared to the estimate of current year and next year earnings for ETEC listed last October, the earnings estimate has changed very little. For October last year the estimates were 2.36 and 3.54 respectively compared to 2.41 and 3.07. Nevertheless, the stock price has been reduced from 58.25 on 10/10/98 to 22.44 as of last Friday's close. That is a decrease of 61 percent. So much for stable earnings estimates holding a stock price up in a declining market. The "baby gets thrown out with the bath water". Several other stocks with good current year and next year earnings are listed in the upper portion of the table resulting in very low next year PE ratios. Notice how AMAT "sticks out like a sore thumb". It is listed with a declining next year earnings estimate and a PE of 36. If it weren't the 1000 lb gorilla of the semi-equips, it would most likely be trading at half the price that it is now to be consistent with the other stocks in the group. Going down the table of next year's earnings estimates, there are 7 out of the 40 stocks (TGAL does not have an estimate for next year) that have negative earnings predictions. The first one is KLIC. For this year, 16 out of the 41 stocks have negative earnings estimates. At the bottom of the table are sums and averages. The total price for the 41 stocks as of Friday is 441.80. The estimated earnings for this year is 0.20. This is 0.005 cents average per share. The PE ratio for the group for this year is 2209. Interestingly, the PE for next year is estimated at 21 - a rather reasonable number. Finally, a brief look at how the earnings estimates have been coming down since last year can be seen by the last three entries in the table. The first of those entries shows the average earnings estimate in October of last year of approximately 1.16 and 1.93 for this year and next year respectively. By 8/28, these numbers had decreased to 0.12 and 0.59. As of Friday's close, the numbers are down to 0.005 and 0.50. It certainly is possible the decreasing numbers may continue in the future. The average stock price of the group will probably continue to decrease until these earnings estimates stabilize at some value and start to rebound. At this point, there is probably a good chance that this years earnings for the group will be negative. 10/02/98 CLOSE EARNINGS EST PE SYMBOL COMPANY PRICE CURR YR NEXT YR NEXT YR ETEC Etec System 22.44 2.41 3.07 7 COHU Cohu 16.81 1.70 1.47 11 MASK Align-Rite International 10.38 1.44 1.62 6 TER Teradyne 17.50 1.41 1.59 11 NVLS Novellus Systems 22.88 1.33 1.49 15 VECO Veeco Instruments 28.13 1.20 1.81 16 AMAT Applied Materials 23.94 1.10 0.66 36 PLAB Photronics 12.75 1.02 1.14 11 DPMI Dupont Photomasks 21.00 0.96 1.85 11 ASMLF ASM Lithography Holdings 15.63 0.79 1.01 15 KLAC KLA Instruments 22.63 0.76 1.52 15 CMOS Credence Systems 12.88 0.63 0.55 23 NANO Nanometrics 6.75 0.50 0.55 12 ATMI ATMI Inc 12.88 0.49 0.76 17 SMTL Semitool 5.88 0.45 0.34 17 SFLX Smartflex Systems 5.56 0.27 0.41 14 SVGI Silicon Valley Group 7.94 0.25 0.07 113 CYMI Cymer 9.00 0.23 0.40 23 SFAM SpeedFAM 12.50 0.19 0.99 13 HELX Helix Technology 9.00 0.18 0.30 30 IMSC Integrated Measurement Systems 5.88 0.13 0.76 8 PRIA Pri Automation 11.56 0.12 0.04 289 PHTN Photon Dynamics 2.94 0.05 0.15 20 KLIC Kulicke & Soffa Industries 12.94 0.03 -0.11 MICN Micrion 6.50 0.02 0.60 11 GSNX Gasonics 4.00 -0.06 -0.24 UTEK Ultratech Stepper 14.63 -0.23 0.35 42 FSII FSI International 5.28 -0.30 -0.35 BRKS Brooks Automation 9.63 -0.33 0.01 963 LTXX LTX 1.91 -0.37 0.12 16 ASYT Asyst Technologies 6.88 -0.37 -0.01 MTSN Mattson Technology 3.38 -0.43 0.29 12 AFLX Adflex Solutions 3.00 -0.44 0.75 4 EGLS Electroglas 8.13 -0.58 -0.27 TGAL Tegal 2.00 -0.81 ASEC Aseco 1.16 -1.00 0.25 5 LRCX Lam Research 9.69 -1.23 1.25 8 CFMT CFM Technologies 7.25 -1.54 -1.04 IPEC Integrated Process Equipment 7.06 -1.55 0.69 10 WJ Watkins Johnson 17.63 -3.20 0.38 46 WFR MEMC Electronic Materials 3.88 -5.02 -4.74 TOTALS 441.80 0.20 20.48 21 AVE ON 10/10/97 1.16 1.93 AVE ON 8/28/98 0.11 0.59 AVE ON 10/2/98 0.005 0.50