Varian Semiconductor Equipment Associates -- VSEA Message Board

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Technology Stocks : Varian Semiconductor Equipment Associates -- VSEA

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To: etchmeister who wrote (1883)	5/1/2009 2:36:01 PM
From: cluka	Read Replies (1) of 1929

Conference call raised more questions than it answered and pointed to certain weaknesses in VSEAs business. It is clear that without full blown ramp in memory expansion VSEA business will not recover to anything close to where it was. Memory business is not likely to make serious investments in a long time to come and it can be argued that half the players in memory should go out of business before we see capacity additions. Consider this, AMAT revenue for this qtr is expected to be $900MM, AMAT market cap is $16.5B, that is price to sales of ~4.6 at current revenue run rate. LRCX revenue is $200MM, market cap 3.5B, P/S ~4.4 VSEA, $65MM, market cap $1.75B, P/S ~6.7!!! Find me another company in sector with number like that. Why does VSEA deserve such premium over LRCX let alone AMAT that has always had higher P/S than any other semi equip stock. VSEA business and prospects simply do not warrant this premium and last nights conference call makes that very clear.

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