Novellus Systems (NVLS): Upgraded to Buy at Amtech

From Notable Calls

AmTech: Novellus Systems (NASDAQ: NVLS): upgrade to Buy. We think much of yesterday's neg pre-ann was based on 1-time events including CMP rev recognition change, inventory write-down, & higher tax rate. Based on checks we think a restructuring of NVLS's biz is currently underway and CMP and dry strip will be discontinued (unprofitable), along w/layoffs. This will improve NVLS's profitability & make it more attractive as a take-over candidate. Stock is currently trading near trough valn levels at 1.6x book. PT $27.50.

Notablecalls: I like this call as the timing is just perfect. The stock got killed yesterday following the pre-announcement & looks to be ready for a bounce.

For more calls go to http://notablecalls.blogspot.com/

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