Maybe I'm wrong. Maybe BRKS has no future? That
is what the
market is saying based on the
valuation given the stock. Try
to find a stock that you
can buy for less than working capital
It is very difficult to do. Sure, things in the
semi equipment sector are tough now. May be awhile
gets better. And yes, I expect them to lose
money for the next
two quarters. Expect a small
inventory writedown too. However, I think the current
valuation of BRKS more than accounts for the tough times
ahead. Today, the market cap fell to $100
Working capital totals $107 million. Sell the inventory,
the Accounts receivable, pay the short term debt, and
distribute all the cash and you have $10 a
share cash to give
shareholders. The company and its
products (hardware, software,
patents, etc.) are all free.
Only ASYT looks better to
I said a few months ago that this stock
would never fall to $10 because it would then have to
ignore the $80 million that
the company picked up in
issuing stock in 1997. Well, I was
wrong. The market
did ignore it. So you had better research it
your own. Maybe I am missing something.
I only disagreed about one
>>My best guess is to ride it down but I'm not
After today, maybe we've turned the corner at
BTW, Its OK if you don't work for them. I was just
trying to figure out where they fit into the market vis
a vis PRIA (don't own yet) and ASYT (own a
ASYT is a broader based company. Their overlap
with Brooks right now is with the components that Hine
Design brings to market. Brooks specialty is cluster
tool systems which is not Hine Designs forte nor
ASYT's. Front ends are more where ASYT is going. Brooks
needs to be there for a total system solution but that
is a slightly diff. market.
If you wanted an
economic justification, I cannot give it to you. I have
just given a small amount of market data as I see it.
I don't see a problem, with the price of BBKS this
low, of having a share in both companies. I don't
think (my opinion only) you'll lose money over the long
haul. It just may take awhile as the market for both
Thanks for the insights. I
would like to have a more direct question. If we
compare the valuations and market positions between ASYT
and BRKS, it looks like ASYT is a better place to
invest. Why should someone buy BRKS ? The reason for my
asking is that I am holding ASYT and am looking to
diversify, and PRIA does not look too attractive in terms of
valuations, and BRKS seems to be closer to
Thanks again for your insight (as well as others')
Have been wondering what to do with my tech
stocks. My best guess is to ride it down but I'm not
As for flat panel equipment... nobody's made money,
that I have seen, on that line. Brooks was into a
pretty heavy development of it but I don't work in FP so
I'm not sure what kind of sales they have had.
far as ASYT/Hine Design, we'll see. Nothing looked
that impressive at Semicon. I would be more worried
about the PRI/Equipe merger. If they ever get their
acts together, they will continue to pick up ex-Brooks
customers because they have adopted ControlWorks as one of
their system software solutions. Too bad their vacuum
robots are so gawdawful.
Lam uses a number of vendors
on their various platforms. He who has the best
equipment at the best price will get designed in.
should be looking at atmospheric robot vendors for a
natural fit. Front ends seem to be the way to go in the
BTW - I don't work for Brooks.
I had not considered that.
It would be logical
to me... lots of free cash out there. I would think
they would have to consider the financial impact of a
couple of more high priced development projects before
they went and spent it though.
thanks for sharing your knowledge. Watching the
deterioration in price of BRKS I can't help but to suspect that
management may be considering some sort of share buy-back,
especially if they keep costs under control and come close
to breaking even this quarter. They have a pretty
healthy cash position and a 2 mill share buyback would
make a big difference to the botom line in come
Also, to prove the adage that "no good deed is
left unpunished" I have a few more questions.
was curious if you had opinions about how (if?) the
Asyst aquisition of Hines impacts Brooks in any way.
(I'd never heard o Hines before, but I noticed LRCX
was Hines largest customer, same as BRKS)
Also, are there any logical acquisitions that BRKS
could make or logical extensions to the product line? I
know that they have a flat panel display line, but it
hasn't seemed to take off yet.
THanks in advance
for your willingness to share your knowledge. Am
looking to average down during the selling squall that
IMHO will continue today.
1.) Brooks has three issues that will hurt
A. The business plan has a flaw in it. Customers
will use Brooks to build development systems (alpha,
beta, pilot production) then get rid of them when it's
time to go to full production as a cost saving
B. Tied in with A, the level of support from Brooks
is generally not well thought of. Therefore when
it's time for customers to build their own systems,
there is not much brand loyalty.
C. By switching
from ControlWorks to Brooks Canada, they lost a lot of
people who were sold on the CW system. Torqued a lot of
Now there is one issue that hurts
Brooks that of course is not their doing. 300mm wafer is
really lagging in the development stage. A couple of
years off is what I heard at Semicon. Well there goes
most of your new sales, and Brooks has a lot of money
tied up in 300mm development.
So the good
Engineering staff at Brooks is probably the finest in the
industry. Engineering to production transitions seem to be
very well done at minimal cost. Brooks' cost
management is a little shakey in that the returns on
investment are pretty poor in an industry where they had
Product line... not as cutting edge
as they use to be. Better than most robotics out
there. Price advantages are not there. Customers are
looking for price breaks even if it means a slightly
inferior product. I mean at 10 million cycles between
failures (the advertised failure rate for the Mag 7 robot)
it's 17 years of average life time before a robot
breaks down. Seen much fab equipment requiring that kind
I purchased BRKS today at the close at the strong
recommendation of my broker at Merrill Lynch. It is currently
priced far below book value and has limited downside and
great upside potential. Hope he is right.