Veeco designs equipment for manufacturers and researchers. The data storage market accounted for 34% of 2007 sales, scientific research and industrial applications accounted for 29%, high-brightness light emitting diodes [HB-LED] and wireless devices for 28%, and the semiconductor market for 9%. VECO generated about a third of its 2007 sales in the Asia Pacific region, a third in North America, 19% in Europe, and 14% in Japan.

LED & Solar Process Equipment is the company’s largest segment, producing 41% of Q1 sales. This segment makes molecular beam epitaxy systems used to fabricate semiconductors and solar panels. It also makes metal organic chemical vapor deposition systems, which produce HB-LEDs for large signs, mobile communications devices, and other applications. The Data Storage Process Equipment segment accounted for 24% of Q1 sales. It makes ion beam etch systems, ion beam deposition systems, diamond-like carbon deposition systems, physical vapor deposition systems, and precision lapping, slicing and dicing systems. The Metrology segment produced 35% of Q1 sales. It makes atomic force microscopes, optical interferometers, and stylus profilers for measuring semiconductor devices and thin film magnetic heads. The segment’s largest customers are manufacturers of semiconductor and data storage devices.

Coercive, government solutions to high energy prices:

1. Investigate oil companies for "price gouging."
2. Impose windfall profits taxes on oil companies.
3. Keep plentiful domestic energy resources off-limits.
4. Pressure (beg) Saudi Arabia to increase output.
5. Regulate stricter CAFE standards for fuel efficiency.
6. Waste taxpayer money to subsidize "demon ethanol."

The market is widely referred to as a discounting mechanism. However, its ability to discount anything extends only as far as the collective knowledge of its participants. And to be blunt, the vast majority of today’s investors— professional or otherwise— know little if anything about making money in the market.

With the advent of discount brokerages— E*trade (ETFC), Ameritrade (AMTD), etc— in the late ‘90s, a huge wave of novice investors entered the US financial markets. Between 1990 and 2000, the number of US households invested in mutual funds doubled from 25 million to 50 million. This wave of new, uninformed money supported two major trends: the Tech Bubble, and the rise of the financial media.

The International Energy Agency provides a sobering analysis of the challenges the world faces in reducing its from dependence on oil and reducing carbon emissions, in its latest biennial analysis Energy Technology Perspectives 2008.

“If governments around the world continue with policies in place to date – the underlying premise in the ETP Baseline scenario to 2050 – CO2 emissions will rise by 130% and oil demand will rise by 70%. This expansion in oil equals five times today’s production of Saudi Arabia,” the report notes.

This week has witnessed some encouraging news on the economic front, but this morning's update on payrolls will mute any temptation for celebrating.

Indeed, the unemployment rate surged upward to 5.5% last month from 5.0% in April, the Bureau of Labor Statistics reports. The jobless rate is now at its highest since October 2004. And let's not forget that unemployment reports are the most politically sensitive economic number and that this is a political year. As a result, we expect the echo chamber to ring loud and clear over this report. Prepare yourself for a hefty dose of discouraging chatter about jobs and the economy this weekend and into next week.

Concerns about bank capitalization came to the fore this week, most notably in the form of worries about Lehman Brothers (LEH). The investment bank is clearly not out of the woods, but at least has a few advantages that Bear Stearns did not.

Fears of a meltdown of the overall financial system have all but evaporated (for now) since the Federal Reserve-led rescue of Bear. And the Fed’s decision to open the discount window to investment banks, at least until September, gives Lehman some breathing room to get its house in order. In addition there seems to be more confidence that Lehman’s management can find a way through the storm than there was for Bear.

There’s lots of buzz out there about how Microsoft (MSFT) supremo Steve Ballmer figures the newspaper will be dead in 10 years — oh yes, and magazines too. Here’s what he said to the Washington Post:

Here are the premises I have. Number one, there will be no media consumption left in 10 years that is not delivered over an IP network. There will be no newspapers, no magazines that are delivered in paper form.

2008-06-06T17:34:38-04:00 Mathew Ingram

Mathew Ingram submits:

There’s lots of buzz out there about how Microsoft (MSFT) supremo Steve Ballmer figures the newspaper will be dead in 10 years — oh yes, and magazines too. Here’s what he said to the Washington Post:

Here are the premises I have. Number one, there will be no media consumption left in 10 years that is not delivered over an IP network. There will be no newspapers, no magazines that are delivered in paper form.

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MSFT WPO GCI NYT SSP LEE MNI BLC JRN JRC MEG NWS Mathew Ingram

The Long Road: Bears Go Home (for Now)

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By Murray Coleman

Small-cap stocks are born to run during market rebounds.

2008-06-06T17:14:22-04:00 Index Universe

IndexUniverse submits:

By Murray Coleman

Small-cap stocks are born to run during market rebounds.

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IWM VBK IJS IJT IXG MDY RSP SPY Index Universe

Ipsen: What It Costs To Buy Into North America

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So how much does it cost for an EU pharmaceutical company to break into the North American market?  

Ipsen can answer that question: three deals and ~$450M.

2008-06-06T16:47:34-04:00 Eben Tessari

Eben Tessari submits:

So how much does it cost for an EU pharmaceutical company to break into the North American market?  

Ipsen can answer that question: three deals and ~$450M.

Complete Story »

TRCA VNLS Eben Tessari

Microsoft: iPhone Envy Is Starting to Show

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Microsoft (MSFT) said it will sell nearly 20 million Windows Mobile licenses in a letter designed to rally its smartphone partners. It’s no coincidence that the pep talk comes just a few days before these the likely launch of Apple’s (AAPL) 3G iPhone.

Todd Bishop has the Windows Mobile pep talk, which is designed to steal a little iPhone thunder. Charles Cooper says it’s quite a salute from Microsoft – perhaps the one-finger variety.

2008-06-06T16:32:09-04:00 Larry Dignan

Larry Dignan (ZDNet) submits:

Microsoft (MSFT) said it will sell nearly 20 million Windows Mobile licenses in a letter designed to rally its smartphone partners. It’s no coincidence that the pep talk comes just a few days before these the likely launch of Apple’s (AAPL) 3G iPhone.

Todd Bishop has the Windows Mobile pep talk, which is designed to steal a little iPhone thunder. Charles Cooper says it’s quite a salute from Microsoft – perhaps the one-finger variety.

Complete Story »

MSFT AAPL Larry Dignan

Is the Banking Index Broken?

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The financial sector, as measured by its proxy, the Philadelphia Banking Index [BKX], has definitely broken down. I said as much before the end of last month. While it seemed that the line everyone was watching (level 75 on the chart) might act as support, it didn’t convince me.

While it put up a bit of a struggle dancing around the line for 3 more trading days, it has now decidedly broken down:

2008-06-06T16:15:38-04:00 Babak

The financial sector, as measured by its proxy, the Philadelphia Banking Index [BKX], has definitely broken down. I said as much before the end of last month. While it seemed that the line everyone was watching (level 75 on the chart) might act as support, it didn’t convince me.

While it put up a bit of a struggle dancing around the line for 3 more trading days, it has now decidedly broken down:

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PJB IYF XLF Babak

The Outlook for Financials Failure

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I don't actually know how long "Is now the time to buy financials?" has been part and parcel of every interview.

While I have been underweight for ages, and still am, there is one aspect to this whole meltdown that we need to keep in mind - an aspect that could be relevant especially if one-year or two-year performance does not matter:

Of the larger financial companies, will there be any that fail as a result of the entire event still unwinding? (I believe Bear Stearns market cap topped out in the $20 billion range, and if that is correct, I would not say it was that large.)

Obviously some folks think there will be failures, and with history as a guide, there might be one or two, which would not be a lot. Point being, most of them will survive.

As far as large cap, domestic banks go, I cast my lot with Bank Of America (BAC) a long time ago but I seriously doubt that Citigroup (C) is going to fail. The next 10 points might be down for all I know, but at some point $21.22 (Thursday's closing price) is going to look like a steal of a price.

If one- or two-year performance does not matter, then a 50% drop from here on its way to $100 at some point in the future (not a prediction of any sort) would not mean anything. While I am not predicting any price for Citi, I will point out that after being left for dead in the early 1990s the stock went up 3000% in about ten years. So the idea that some distressed bank stock could be a five-bagger sometime between now and the next financial crisis may not be ludicrous.

Further, any stock with a high yield that can maintain that dividend would add dramatically to the compounding effect of buying the right distressed stock.

To be clear, I am not yet increasing my weight in the sector. The environment is not healthy, but of course it will get healthy again, and just as financials have lagged badly recently, they will outperform at some point. Today's post is not a prediction of when it will happen, just a little reminder of the cyclical nature of this sort of thing.

2008-06-06T15:49:27-04:00 Roger Nusbaum

Roger Nusbaum submits:

I don't actually know how long "Is now the time to buy financials?" has been part and parcel of every interview.

While I have been underweight for ages, and still am, there is one aspect to this whole meltdown that we need to keep in mind - an aspect that could be relevant especially if one-year or two-year performance does not matter:

Of the larger financial companies, will there be any that fail as a result of the entire event still unwinding? (I believe Bear Stearns market cap topped out in the $20 billion range, and if that is correct, I would not say it was that large.)

Obviously some folks think there will be failures, and with history as a guide, there might be one or two, which would not be a lot. Point being, most of them will survive.

As far as large cap, domestic banks go, I cast my lot with Bank Of America (BAC) a long time ago but I seriously doubt that Citigroup (C) is going to fail. The next 10 points might be down for all I know, but at some point $21.22 (Thursday's closing price) is going to look like a steal of a price.

If one- or two-year performance does not matter, then a 50% drop from here on its way to $100 at some point in the future (not a prediction of any sort) would not mean anything. While I am not predicting any price for Citi, I will point out that after being left for dead in the early 1990s the stock went up 3000% in about ten years. So the idea that some distressed bank stock could be a five-bagger sometime between now and the next financial crisis may not be ludicrous.

Further, any stock with a high yield that can maintain that dividend would add dramatically to the compounding effect of buying the right distressed stock.

To be clear, I am not yet increasing my weight in the sector. The environment is not healthy, but of course it will get healthy again, and just as financials have lagged badly recently, they will outperform at some point. Today's post is not a prediction of when it will happen, just a little reminder of the cyclical nature of this sort of thing.

Complete Story »

C BAC Roger Nusbaum

MBIA and Ambac: Edge of the Cliff, Ratings-Wise

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