Matthew Kerkhoff, options expert and editor of Dow Theory Letters, continues his 14-part educational...
FEI: A Core Nanotech
04/01/2005 12:00 am EST
"Like the Internet and biotech markets, growth in nanotechnology will be characterized by fits and starts," says Josh Wolfe. "Thus, we advise investing for the long-run, not to trade positions for days and months." Here, he looks at one long-term favorite in the sector.
"It's been said that new technologies are almost always
overestimated in the short-run, but underestimated over the long-run. And
therein lies the opportunity for nanotechnology investors. Today's investors are
paying the lowest valuations for nanotech-related securities since we started
the Forbes/Wolfe Nanotech Report
in 2002. The valuations are relatively low, yet the
pace of new nanotech development is chugging along at breakneck speed.
"We consider FEI Company (FEIC NASDAQ) to be one of the top nanotech buys for 2005. While other corporations with a history in semiconductor equipment are content riding the ebbs and flows of the chip cycle, FEI has aggressively sought to become the leading provider of tools for atomic-scale characterization, analysis, and manipulation. Its ion-beam and electron-beam microscopes are standards in research labs worldwide.
"But the company has also recognized that equipment purchases by nanotech centers and research labs only scratch the surface of the potential market. So FEI is gearing up for the next nanotechnology build-out by nanotech start-ups flush with venture capital and established corporations adopting broad nano-initiatives. In addition, FEI recently announced the addition of Larry Bock, the well-regarded executive chairman of Nanosys, to its board of directors. Bock will work with FEI executives to help create the next generation of instrumentation essential to cutting-edge nanotechnology development. We consider FEI a low-risk way to play nanotechnology's growth and development and advise looking past the near-term 'noise' to make this a core holding."