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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: ET who wrote (5230)	1/14/1999 12:25:00 AM
From: Stitch	Respond to of 9256

ET, OT <<robert ....look at Veeco....[veco]...that company might interest you..... >> Inasmuch as you have been beating the VECO drum since its 12 month low of 19+change, and is now at 62+change, you have the gorilla braggin rights. Incredibly nice call. But for now I think if you like the sector, then ZIGO, a "sort of" competitor to VECO, has a bit more leg room. That is not to say I think VECO has completely run out of room. But I think ZIGO will double this year from its current price. Here is why I think so. Zygo and Veco competed to buy Digital Instruments. Veco won, but at the time, also had a deal with IBM to sell IBM's AFM. When they bought Digital they forfeited the IBM relationship which Zygo promptly picked up. That relationship has recently strengthened to include additional products. It is a great product line and will carry Zygo's label as opposed to IBM's. In addition, Zygo's newest Displacement Measuring Interferometer, the ZMI 510, offers all of the technological advantages of a heterodyne based displacement interferometer, but at pricing levels more commonly associated with high-resolution mechanical encoder systems. These measurements are no longer exclusively required in the laboratory and are making their way to the factory floor. "Equipment manufacturers of mask, wafer, and LCD inspection and measurement equipment, memory repair tools, probers, die bonders, precision drilling tools are being challenged to improve the accuracy of their motion systems, cover longer distances, and maintain or reduce costs. The ZMI 510 becomes a very favorable position feedback option when compared to mechanical encoders. The ZMI 510 can move faster, offer longer lengths of travel, and will not adversely impact the cost of goods". I also understand Zygo's NewView 5000 3D surface profiler is getting good reviews for repeatability and accuracy. (Guage Repeatability is better then 96% for measurements of steps as low as 150 nanometers). The NewView 5000 is a lower cost version of the NewView200 which was a maintstay in terms of keeping Zygo's BTB ratio over 1.0 over the last several quarters. (That BTB also suggests a reduced reliance on the Semiconductor and DD markets). The reason that this is important is, again, due to critical measurements migrating to the production line from the labs, especially where very shallow etching is required such as air bearing surfaces in recording heads in disk drives. (increasingly required for lower flying heights). Finally I really like Zygo's acquisition of NextStar Automation. Applying automation to their increasing focus on yield improvement tools (as opposed to lab measurements) makes good sense and has already yielded orders in the disk flatness measurement arena. All the above coupled with Zygo's cost containment impresses me. They are debt free and have $27M in the bank and are trading at approximately 2.4X book and 2.03X sales. Of four analysts following them 1 has them rated at a "strong buy" and the other three have them at "buy". This last fact is the only thing that troubles me about the stock but I bought them anyway recently.<G> By the way, you may want to check out their insider trading. I like guys that believe in themselves. Best, Stitch