Hold yer guns there, pardner. Don't be a-goin' into dem chips, ya hear?
Credit Suisse First Boston
analyst John Pitzer made some notes about the semiconductor equipment industry, telling investors that now is not the time to snap up those battered semiconductors. In a note to investors this morning, the analyst wrote, in all capital letters, no less: "We continue to believe that a better buying opportunity will present itself in
the first quarter of 2001."
Pitzer said that although changes in the Fed bias and rate picture seem imminent, this sector won't really be affected. Put simply, semiconductors will gain no solace if the Fed makes changes. This industry is still bound by the fundamental laws of supply and demand. And right now, demand seems to be abating as capital spending in the semiconductor industry declines.
"We have been cautioning that the semiconductor industry was in the midst of a inventory correction, the depth and breadth of which was perhaps more severe than most realized," he wrote. "The impact of this inventory correction would be a dramatic reduction in capital budgets for capacity addition in 2001, especially
the first half of 2001."
In plain English, don't look for the picture to change until mid-2001, since inventory levels are still quite high.
: UP to buy from neutral at
Salomon Smith Barney
: DOWN to hold from strong buy at
: DOWN to accumulate from buy at
: DOWN to neutral at
Alliance Forest Products
: NEW neutral at Solomon Smith Barney.
American Home Products
: NEW buy at Credit Suisse First Boston.
: NEW hold at CSFB.
: NEW buy at CSFB.
: NEW accumulate at
; price target: $10.
: NEW attractive at
: NEW hold at Prudential Securities; price target: $5.
New Skies Satellite
: NEW buy at ING Barings; price target: $13.
: NEW attractive at Robertson Stevens.
: NEW buy at Solomon Smith Barney.
initiated coverage on a handful of paper companies, starting them all at buy. In its recommendation to investors, it wrote: "Shares of paper companies have endured the worst bear markets vs. the
S&P 500 since the Great Depression." It recommended an overweight position in the following companies: