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

To: Donald Wennerstrom who wrote (2290)	10/26/1998 6:32:00 PM
From: Joe Dancy	Read Replies (1) \| Respond to of 2754

We've broken the 50 day moving average but not the 200 day. Volume looks strong the last few days. dailystocks.net Joe

To: Donald Wennerstrom who wrote (2290)	10/26/1998 11:42:00 PM
From: Donald Wennerstrom	Read Replies (1) \| Respond to of 2754

As everyone knows at this point, the runup in semi-equip prices over the last 2 weeks has been nothing short of phenomenal. The group of 41 stocks started up on 9 October, and as of Friday's close on 10/23, the group average is up 45 percent in just 10 trading days. At the same time, First Call has been reporting a furious reduction in earnings estimates for this year and next year earnings estimates. Three weeks ago, on 2 October, the earnings estimates by First Call for each individual stock in the group of 41 were noted. Then, as of this week, ending 23 October, the earnings estimates by First Call for each stock were updated. The results were put in tabular form and compared by subtracting this weeks estimates from those of 3 weeks ago. The results are shown for each stock in the table below. There are several items of interest. First, for current year earnings estimates, 23 stocks had reductions and only 2 had increases (NVLS and PHTN). For next year earnings estimates, 23 stocks had reductions and only 2 had increases as well (NVLS and SFLX). Secondly, the aggregate result of all the individual reductions led to a very substantial reduction for the group averages. The estimate for this years earnings went from a positive $0.20 to a negative $4.05. The estimate for next years earnings were reduced from $20.48 to $14.20, a reduction of 31 percent. In summary, it is hard to imagine a more severe 3 week period of earnings estimate reduction in the past by First Call. This same 3 week period saw one of the best, if not the best ever, percentage increase in semi-equip stock price rise performance in history. The correlation index between these 2 factors is about as close to zero as you can get, unless you subscribe to the contrarian point of view. WEEK OF 10/23/98 3 WEEK CHANGE EARNINGS EST SYMBOL COMPANY CURR YR NEXT YR AFLX Adflex Solutions -0.06 -0.16 AMAT Applied Materials 0.00 -0.08 ASEC Aseco -0.03 -0.10 ASMLF ASM Lithography Holdings -0.17 -0.49 ASYT Asyst Technologies -0.56 -0.22 ATMI ATMI Inc -0.08 -0.31 BRKS Brooks Automation 0.00 0.00 CFMT CFM Technologies 0.00 0.00 CMOS Credence Systems -0.13 -0.30 COHU Cohu -0.40 -0.74 CYMI Cymer -0.01 0.00 DPMI Dupont Photomasks 0.00 -0.09 EGLS Electroglas 0.00 0.00 ETEC Etec System -0.13 -0.42 FSII FSI International -0.23 0.00 GSNX Gasonics 0.00 0.00 HELX Helix Technology 0.00 0.00 IMSC Integrated Measurement Systems -0.05 -0.06 IPEC Integrated Process Equipment -0.17 -0.32 KLAC KLA Instruments -0.25 -0.18 KLIC Kulicke & Soffa Industries -0.01 0.00 LRCX Lam Research -1.44 -1.13 LTXX LTX 0.00 0.00 MASK Align-Rite International 0.00 0.00 MICN Micrion 0.00 0.00 MTSN Mattson Technology 0.00 0.00 NANO Nanometrics -0.10 -0.13 NVLS Novellus Systems 0.18 0.09 PHTN Photon Dynamics 0.10 -0.15 PLAB Photronics 0.00 -0.01 PRIA Pri Automation 0.00 0.00 SFAM SpeedFAM -0.35 -0.53 SFLX Smartflex Systems -0.02 0.01 SMTL Semitool 0.00 0.00 SVGI Silicon Valley Group -0.08 -0.63 TER Teradyne -0.04 -0.09 TGAL Tegal 0.00 0.00 UTEK Ultratech Stepper 0.00 0.00 VECO Veeco Instruments -0.03 -0.06 WFR MEMC Electronic Materials -0.11 -0.05 WJ Watkins Johnson -0.08 -0.13 TOTALS -4.25 -6.28 EARNINGS WEEK OF 10/2/98 0.20 20.48 EARNINGS WEEK OF 10/23/98 -4.05 14.20 PERCENT CHANGE IN 3 WEEKS -31