Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of LED equipment maker Veeco Instruments (VECO 1.88%) soared 17% today after its first-quarter bookings and business update impressed Wall Street.
So what: The stock has been pummeled over the past two years on a supply glut in the industry, but better-than-expected bookings in the first quarter -- $70 million -- suggests that things are beginning to pick up. While business conditions remain challenging, the slight improvement seems to be reigniting optimism over the industry's long-term growth prospects.
Now what: Despite limited visibility, management expects bookings to be significantly higher in the second quarter. "Looking ahead, end market signals in MOCVD are mixed but appear to be trending in a positive direction," Chairman and CEO John Peeler said. "Some key LED customers are operating at close to full utilization rates, and we are now booking some rush purchase orders -- the first we have seen in two years." With the stock flirting with its 52-week highs and trading at a 30-plus forward P/E, however, I'd wait for some of the excitement to fade before betting too much on that turnaround talk.
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