RawGreed Requests, ACLS

Posted on November 18, 2005 , filed under Stocks | Print This Post

Sashi G. writes,

ACLS, I bought it at $5.80 but ER crushed it. What do you think?

ACLS, Axcelis Technologies Inc. engages in the design, manufacture, and sale of ion implantation, dry strip, thermal processing, and curing equipment used in the fabrication of semiconductor chips.

While I am generally bullish on semiconductor stocks, at the moment I’m not sure that investing in ACLS is a good idea. ACLS appears to be on a steady decline from lackluster earnings reports. The recent drop may be overdone, but I would wait on the sidelines to watch what happens before jumping in. I see more downside risk before the stock has a chance of reversing. Semiconductor foundries must make the most of existing equipment since their profit margins are being cut down. I believe that ACLS will have to wait until most semiconductor fabricators completely phase out current equipment before orders for new equipment will pick up. It looks to me that ACLS will benefit midway into a semiconductor industry recovery, when the budget of its customers gradually increases.

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