You are not a shareholder in BRKS. If you were but thought it was worth 20% less, you would sell. If you inherited it from Helix, you would have appeared on this board before a year went by, given the time you spend lurking here now. If you were, every comment you've made since appearing wouldn't have been negative. If you were, you would not willfully misunderstand my posts and then ignore my clarificiations. You are not a shareholder in BRKS. My hostility stems from the fact you are posing as one.
The fact that the BOD fired top management almost a year ago is a good thing. They saw problems and took action to address them. That is their role. Do you think they shouldn't have done this? Do you think a company that fires it's CEO is doomed for all eternity? Lepofsky is a good choice for CEO, knowing BRKS pretty well going in (and the Helix part better than that) and immediately recognizing the need for change. He has been more aggressive than I expected in pursuing fixes, and my hat is off to him.
Why the hostility? Why the slam on my motives?
It appears you've invested both money AND ego
into Brooks, and resent the insinuation your
judgment is faulty. You think BRKS is "buy"
today, while I believe it's overvalued by at
least 20%. Surely we can have a difference of
opinion without the body slams. Can't we?
And why don't you believe I'm a shareholder
in Brooks? Do you feel that share ownership
automatically demands lockstep loyalty? Well
I am indeed a owner, sadly inherited from
the conversion from Helix into BRKS.
Finally you didn't address why the board
cashiered all the top brass if they share
your outlook. To me there's only one plausible
answer: perceived failure on their part.
Lastly, why the insinuation I'm a "basher"?
And do you REALLY believe one anonymous poster
on a message board could have any impact on
the buy/sell decisions of institutional
owners? Would that I had that power. Thanks
for your vote of confidence in my abilities.
Frankly I doubt you a shareholder. You sound more like a paid basher willfully misunderstanding my points.
BRKS gross margin, and consequently operating margin and profits, rise much faster during up cycles than other players. I've shown BRKS GM can rise from 25% to 40+%. Do you expect AMAT gross margins to rise from 45% to 60+%, or on a proportional basis from 45% to 75%? Or did you not comprehend my sentence "This feeds into their swings in operating margins with the cycle, swings which are more dramatic than companies with admittedly solider operating models like NVLS, AMAT or LCRX"? Or are you just full of shit?
As far your contention that a higher beta translates into outperformance during semi cap ex up-cycles, try learning what beta is (hint: beta is a measure of the degree of daily movements compared to the S&P 500, not a measure over industry-specific cycles). If that doesn't sink in, you could try look at a chart, such as showing BRKS vs AMAT and NVLS. And if you can't manage that, you really are full of shit!
You may be sanquine about the lousy gross margins for BRKS, but I'm not. For the last 4 quarters, it's averaged a paltry 26%, the lowest
I've found in the semi-equipment field. It's
interesting you reach back 2 years ago to
present decent numbers. Some would call that
apologetic exculpation. AMAT has averaged
45% that last 4 qtrs. You tell me with a
straight face which is the better run company.
As for the volatility of BRKS favoring it in
the up cycle, Novellus actually has a higher
Beta than does Brooks. AMAT's listed at .22,
which I assume is a typo.
Finally, it doesn't appear that the board
agrees with your favorable opinion of BRKS.
Having fired the entire top management and inserted Lepofsky in the corner office speaks
volumes. The irony of course is he is part
of the problem here. In short, BRKS is an
astoundingly mediocre company whose share
holders have been brutalized. You look forward
to a brighter tomorrow, while I think the
shares aren't worth a penny over $6. As a
shareholder, I hope you're right.
Not sure who you're replying to there, so I'll throw this in...
First, BRKS gross margins haven't been 25% for a long time, only during this down cycle. Earlier they were in the 30%s, up to 42.5% in the quarter ending 9/06 (although on a slightly different business mix, less CDA). This feeds into their swings in operating margins with the cycle, swings which are more dramatic than companies with admittedly solider operating models like NVLS, AMAT or LCRX.
Second, BRKS profits swing more with their operating margins, again more dramatically than those other front end companies. If you want to estimate future cycle-peak profits, don't look at inevitably wrong analyst estimates, look at how BRKS has done during prior cycle peaks.
Third, BRKS share price swings with their profits. Again, more than for LRCX, AMAT, etc. Just compare charts for prior up cycles (look at 5 or 10 year charts), you'll see BRKS outperforming those other players. BRKS is a nice choice for the up-cycle, a lousy choice for the down-cycle. I'm betting we are much nearer an up leg than a down leg. Like you said, "place your bets", I'm placing mine.
Never heard of them, but I suspect they have
a 2-3 time horizon. Are you that patient?
At $8.50 today, Brook strikes me as still
tremendously overpriced. '09's estimate is
just $.27/share, meaning you're paying a 30 PE.
That's a deal? AMAT, as industry leader and
rock solid finances is today selling at just
18X next years earnings. Should BRKS fall to
around $6, it'd be tempting. I'd hold off for
now, as I suspect they'll be cheaper soon.
You're confused. AMAT is a customer of BRKS, not a competitor. Brooks Automation is the largest semiconductor automation equipment company in the world. It's customers include. Applied Materials, Lam Research. Novellus, KLA Tencor, and the list goes on and on. The stock is way undervalued at this point. Book value is $12.17.