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Nanotech Returns: A Veeco Rerun
01/09/2004 12:00 am EST
Only one advisor in this year's special issue selected the same stock that he had picked for 2003. Josh Wolfe once again chooses Veeco, which has since risen a remarkable 134% in price over the past year. Yet, the nanotech expert remains equally optimistic about its future.
"I view Veeco Instruments (VECO NASDAQ) as the leader in nanotechnology instrumentation, with 70% worldwide market share in Atomic Force Microscopes (AFMs)—a product line that generated $110 million in sales in 2002. I was recently in the Oval Office with President Bush as he signed a 4-year, $3.7 billion bill devoted to nanotech research. The surge in worldwide government funding for nanotechnology (more than $3 billion in 2003) is driving new purchases of metrology equipment. Despite the fact that Scientific Research (including nanotechnology) accounts for the largest portion (roughly 40% or $119 million) of their end market sales in 2002, Wall Street currently classifies Veeco as a semiconductor capital equipment business largely by default.
"I’ve been a fan of Veeco for some time now, but we find today’s opportunity particularly compelling. The stock has significant catalysts in the coming months. CEO Ed Braun has publicly forecast annual research revenues attributed to nanotech to surge from today’s $50 million to $150-$200 million over the next three years. But chip equipment analysts are not nanotech believers—and they’ve yet to adjust their estimates. This will change. I anticipate Veeco’s upcoming Q4 (a seasonally strong quarter for scientific research sales) will show even greater strength in the research business than the Street is looking for."
Josh Wolfe will be participating in Technology World Leaders Panel at The World Money Show in Orlando, Florida, February 5, 2004. Tickets are $59.00 through January 22, $69.00 afterwards. Click here for more information or to purchase tickets.
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