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Brooks Automation, Inc. Message Board

  • artaxerxes5 artaxerxes5 Apr 10, 2008 4:44 PM Flag

    BRKS vs. Peer Group: More Bad News

    I posted awhile back that, compared to the
    companies BRKS itself uses as their chosen
    peer group, BRKS's sales/price ratio
    was worse than all but one of them. Now,
    after some quick calculating, it seems that
    BRKS once again has a stranglehold on the
    bottom rung of the ladder. Comparing the
    gross profit margins of these 10 companies,
    BRKS at just 29.5% of sales is again next to
    the bottom. Again, only lowly UCTT has managed to turn in worst numbers. By comparison, MKSI has a 41% margin, and Lam tops the group
    with a whopping 50%! It appears either BRKS's
    production costs are out of whack, or their
    products are too second rate to demand much
    of a premium. It's also sad to note that not
    too long ago, the share prices of BRKS and
    AMAT were comparable. Now, with AMAT at twice
    that of BRKS, it further highlights what a
    lousy company/investment BRKS has been.

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    • art,

      Looked at the P/E of AMAT and it's at 18.
      While looking at the P/E of BRKS it's at 6.
      BRKS is down 50% from it's 52 week high.
      Semi's are cyclical and Wall Street is always
      6 to 9 months ahead of the curve.
      Today the talk was all about the Tec. sector.
      Sure BRKS can go down to 9 or a bit lower but
      chances are that the stock price will go back
      up to 20.00 per share in the next 12 to 18 months.
      Some Funds buy the worst of the DOW Jones
      stocks, the ones that pay the highest
      dividends and do sometimes outperform the rest
      of the DOW by doing so.
      A lousy Co. "yes", but a Co. you could double
      your investment when management starts doing
      the "right thing".

      • 1 Reply to applejak107
      • I'm not exactly sure what your point is. I
        posted that BRKS is a lousy company in a
        cut-throat business, and you seem to agree,
        but then offer qualifiers. The fact is Wall
        Street hates this company. The lackluster
        returns and low gross margins are why. Sure,
        at $9-10 BRKS has great potential upside for
        those of a trading mindset, but as AMAT and
        those in BRKS's peer group demonstrate, when
        the cycle turns down BRKS gets unmercifully
        hammered to a greater extent than do the
        others. Perhaps if BRKS had been better run
        in the past, it wouldn't have such a low
        price/sales ratio today. If you find solace
        in the future, good for you. I instead look
        at where we are today and am aghast at the
        incompetence of the management.

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