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Brooks Automation, Inc. Message Board

  • Paul34_NY Paul34_NY Aug 1, 2003 11:57 AM Flag

    i see his point -- this is a big winner

    August 1, 2003

    J.P. Morgan Securities Inc. - Equity Research


    Jay Deahna (1-949) 718-6670
    jay.deahna@jpmorgan.com
    Ben Pang (1-415) 315-6755
    ben.pang@jpmorgan.com
    Philip H. Lee (1-949) 718-6691
    philip.h.lee@jpmorgan.com

    Brooks-Automation ( Overweight )
    Adding to Focus List with a $51 12-Month Price Target

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Very technical, not....very stupid, duh!!!!

    • "I'm melting", said the wicked witch of Brooks.

    • less $21!!!

      Rebounds in the Semi sector are why BRKS is in the teens to begin with... Problem is, they're the only "rebounder" whose Stock Price doubled while their numbers Sucked!

      Tons of smart investors are shorting the crap out of tech. stocks with positive earnings and 2 quarters worth of turnaround numbers that BRKS doesn't even rate with. Why would BRKS continue to pound through resistance with crappy fundamentals when good companies can't even do that?

    • until next year sometime... SURE, we believe you... or is that "we be leaving you"??

      By the way, I'm "watching the run"... and what a run it is, from nearly $21 at the open right back to where we started yesterday... the toilet is next! can you say "Shorts Rule"?

    • As of last week, Brooks is now tracking 18 fab projects that will likely
      commence production in 2003.The company now sees twelve potential projects
      commencing in the second half, an increase of one.However, it now views only
      two of them as risky.From a net perspective, the company sees ten safe
      projects in the second half now versus six two months ago, an addition of four
      projects, which is meaningful.Additionally, the company now sees four
      additional projects that may pull into late 2003 from 2004.Brooks sells long
      lead-time fab software and AMHS (Automated Material Handling Systems) systems,
      which are the large fab automation systems that transport pods of wafers
      around the fab from machine to machine and in and out of storage.As such, we
      believe the company will be an early bookings beneficiary if a pick up in new
      fab and expansion activity materializes.Therefore, it is likely Brooks will
      begin to experience a series of upside forecast revisions in earnest, which is
      the typical cyclical profile, especially for high amplitude capacity plays
      within the equipment industry.Automation suppliers have minimal?technology buy?
      profiles.

      We Think Brooks Is Poised To Deliver The "Pot Of Gold" At The End Of The
      Rainbow
      In the 1999-2002 time frame, Brooks executed an acquisition binge to create a
      fab and tool automation supermarket.The company succeeded, and is now the world
      's largest supplier of fab automation gear to the semiconductor industry.
      Brooks has a number one or two market share position in all of its served
      markets except AMHS, where it introduced an exciting new product at
      SemiconWest.Consequently, Brooks is poised to fully participate in the next
      several semiconductor capital spending cycles and will likely outgrow the
      industry, especially as 300mm fabs that use more automation than 200mm fabs
      represent the majority of incremental capital spending.

    • * Recent activation of numerous fab projects should spark an order surge for
      automation and other long lead-time capacity items in C2H03, in our view. We
      believe BRKS shares can experience above-average multiple expansion coincident
      with above-average bookings acceleration as the number of new or expansion fab
      projects likely to commence in 2003 has increased meaningfully from late May
      to the present.

      * Our 12-month price target is $51, or 22x our C2005 EPS of $2.30. BRKS shares
      peaked at 24x in 1995 and 47x in 2000, but we are using a lower multiple on
      post-bubble era, slower secular technology-related growth expectations. We see
      upside risk to our target if fundamentals exceed expectations for several
      quarters, which would likely drive a funds flow-related overvaluation in
      equipment stocks.

      * We believe valuation is compelling at current levels; adding to Focus List.
      We believe the recent correction is a consolidation of the recent furious
      move, and BRKS shares should outperform from now until year end assuming
      bookings for automation accelerate. At 8.4x our C2005 EPS estimate, BRKS
      shares trade at a meaningful discount to our group average of 14.2x, AMAT at
      21.8x, and NVLS at 30.3x.

      * We believe Applied Materials' earnings release on August 12th will likely be
      positive for the group and should reduce the likelihood of a deep summer
      correction in equipment stocks. We were waiting for a deep summer correction
      to put stocks on our Focus List, but since a deep dip seems less likely due to
      increased fab activity and a likely strong outlook from Applied, we chose to
      do it sooner rather than later.

      • 2 Replies to Paul34_NY
      • in fact, BEWARE... FOCUS means "watch" for a better entry point...

        Also, we may be wise to note that a "deep correction" for BRKS means $8-$9/share. JP is still anticipating a "correction"... which would probably put the shares around 10-15% off their 50-day moving average which (I think) puts the stock around $13-$14/share.

      • "* Our 12-month price target is $51, or 22x our C2005 EPS of $2.30. BRKS shares
        peaked at 24x in 1995 and 47x in 2000, but we are using a lower multiple on
        post-bubble era, slower secular technology-related growth expectations. We see
        upside risk to our target if fundamentals exceed expectations for several
        quarters, which would likely drive a funds flow-related overvaluation in
        equipment stocks."

        Yeah, now I see his point. That CY2005 $2.30 estimate seems a wee bit conservative to me, especially given how these analysts have been missing the estimates so narrowly these days. I wonder why he didn't run for the roses too and go for $10 in earnings? It seems just as likely to be achieved as the $2.30 he pulled out of his ass.

        I wonder if he can pull monkeys out of his ass too?

 
BRKS
10.43-0.09(-0.86%)Jul 11 4:00 PMEDT

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