CHICAGO, April 13, 2011 /PRNewswire/ -- Zacks.com
announces the list of stocks featured in the Analyst Blog. Every
day the Zacks Equity Research analysts discuss the latest news and
events impacting stocks and the financial markets. Stocks recently
featured in the blog include: KLA-Tencor (Nasdaq:
KLAC), Taiwan Semiconductor Manufacturing
Company (NYSE: TSM), Apple Inc (Nasdaq: AAPL),
Texas Instruments (NYSE: TXN) and Cymer
Inc (Nasdaq: CYMI).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
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Here are highlights from Tuesday's Analyst
Blog:
Semi Equipment Nose-Diving
We have been watching the semi equipment stocks closely over the
last few days and it seems as if our fears have been realized. Over
the last five days, shares of semiconductor equipment stocks such
as KLA-Tencor (Nasdaq: KLAC) have fallen more than
5%.
Moreover, the decline was more pronounced after April 7, when Taiwan Semiconductor
Manufacturing Company (NYSE: TSM) lowered its outlook on
semiconductor unit growth for 2011, citing concerns related to
Japan.
We cannot say we are surprised. We have been thinking that the
Japan crisis could have a more
far-reaching effect on semiconductor manufacturing than immediately
met the eye. This is because Japan
is not only a significant consumer of semiconductors, but also a
significant supplier.
What this basically means is that components coming out of
Japan will be in short supply, as
we have seen in the case of components for Apple Inc's
(Nasdaq: AAPL) iPad. This would mean that the
components not coming out of Japan, which are also designed into the iPad
(for example) would fall into excess, when the end product did not
sell as much as previously expected. This would result in
accumulation of component inventories, caution at manufacturers and
a lower level of demand overall.
For those lucky companies that do not have direct operations in
Japan, there will not be any costs
associated with resumption of production and trade. And for those
like Texas Instruments (NYSE: TXN) that are able
to transfer most of the manufacturing elsewhere, lead times may not
stretch out too much. But others will have to take charges
depending on the extent of damage.
The companies that have been worst affected have been
tight-lipped about the extent of damage and here the assessment
process appears to be ongoing. For equipment companies, this is
negative in the short term, since supply to Japan will come to a standstill, with ripple
effects impacting spending in other regions as well.
However, it could be a positive longer-term, since Japan will have to rebuild infrastructure,
which would prove beneficial for these companies. Therefore, the
weakness could be a buying opportunity. Also, some equipment
makers, such as Cymer Inc (Nasdaq: CYMI) have seen
their strongest competition demolished by the tsunami, so they will
continue to enjoy stronger-than-expected demand in the
near-to-medium term.
KLA-Tencor and Cymer remain Zacks #2 Ranked stocks, indicating a
Buy recommendation over the next 1-3 months.
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