To: Broken_Clock who wrote (7001 ) 1/29/1999 7:58:00 PM From: SJS Respond to
That's a long time, as we both know. Here's a tibit to think about. For the MONTH of January, Fidelity Select Electronics fund was up 20.66%. Right. MONTH.it appears they have finally gotten the chip equipment sector right. Today, the Philadelphia Semiconductor Index has surged 3%, led by sharp advances in chip equipment stocks. Largely responsible for the rally is a BancBoston Robertson Stephen upgrade of five semiconductor equipment stocks. The firm raised Applied Materials (AMAT 62 3/16 +3 3/16), Novellus (NVLS 72 1/8 +4 7/16) and Teradyne ( TER 62 1/2 +4) to "strong buy from "buy," while upping Lam Research (LRCX 38 5/8 +6 5/16) and Advanced Energy Industries (AEIS 28 3/4 +2 1/4) from "long-term attractive" to "buy." So what is the attraction to a group that continues to report revenue that is 50% below year-ago level and, at profits that are flat, at best? Well, the great thing about being a turnaround play is that the company literally gets to start over. The rearview mirror is removed (yr-ago comparisons) and the market focuses its attention on the road ahead. So, while Lam Research reports a quarterly loss of $0.64 a share on a 51% decline in revenue, the stock is today trading at a 52-week high. Although results stunk, the company told analysts what they were waiting to hear: "Early signs of a recovery in the semiconductor industry have led to increased demand for wafer processing equipment." With industry book-to-bill showing a sharp rebound over past two months and companies giving indications that the worse is over, it is clear that the chip equipment turnaround is firmly in place.
