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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: William Griffin who wrote (29846)	4/30/1999 8:14:00 AM
From: Rob C.	Respond to of 70976

Mike O'Brien created a hell of a buying opportunity for his firm yesterday...I would imagine Soundview was on the bid most of the day yesterday. SAN FRANCISCO, April 29 (Reuters) - Shares of semiconductor equipment makers, which develop the hefty systems used to make computer chips, fell broadly on Thursday after a Wall Street analyst sounded a cautious note about their high price levels. SoundView Financial Group analyst Mike O'Brien said he took Teradyne Inc. <TER.N> off the firm's recommended list, and said he was wary about the other stocks in the group. Shares of Teradyne fell $4.375 to $49.31 on the New York Stock Exchange on Thursday. Applied Materials Inc. <AMAT.O> was the second most actively traded stock on NASDAQ, falling $2.31 to $51.875 and Novellus Systems Inc. <NVLS.O>, another chip equipment maker dropped $2.06 to $49.44 on Nasdaq. KLA-Tencor Inc. <KLAC.O> slipped $1.19 to $50.81, and Lam Research Inc. <LRCX.O> eased $1.375 to $31.375, both on Nasdaq. O'Brien said that memory chip prices are declining again, and the lower prices may make it harder for the big memory chip makers to buy new equipment. "People are getting worried, as we get into the third and fourth quarter and 2000, about whether the buys for additional equipment will happen," he said. "So we are just saying that if that is coming into question, the valuations are probably going to get compressed." O'Brien said the stocks are currently trading at about 25-30 times 2000 earnings estimates, higher than their typical average price/earnings ratio of 20 times forward earnings. He continues to rate Teradyne a strong buy and Applied Materials, the world's largest maker of chip equipment, a strong buy. "It is still likely that the spending cycle could continue, but a fear of a hiccup puts into question whether people are willing to pay 25 to 30 times forward earnings," O'Brien said.