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 chip-making equipment builder Novellus Systems
So what: Novellus' second-quarter report, published last night, beat Wall Street's earnings estimates but offered a gloomy view of the coming quarter. The report also dragged down shares of fellow chip-tech providers such as LAM Research
Now what: The ebullient buildout of semiconductor manufacturing lines that started in 2010 appears to have ended as Novellus CEO Rick Hill reports "a cautious tone and a feeling of uncertainty" at each of his six largest customers. Though Hill also noted that largest buyer Intel
Analyst firm DA Davidson sees a buying opportunity here as Novellus' long-term prospects remain strong, but hedge funds have been selling this stock by the bucketload recently. I'd largely agree with the bulls, though Novellus doesn't stand out as a top choice in the crowded chip-building gear sector.
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