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WHEN THE CHIPS ARE DOWN--HESITATEBARGAIN HUNTERS, BEWARE of shares of semiconductor-equipment makers, says Christopher McHugh, one of 1997's top mutual-fund managers. The Asian financial crisis means Asian chipmakers aren't building new factories. So who needs the equipment to make the chips? That reasoning, however, doesn't faze some analysts who are now recommending the likes of Applied Materials, Teradyne, and KLA-Tencor. With these stocks off about 50% since last fall, they figure it's time for a little bottom-fishing. Don't go near the water, says McHugh, co-manager of Turner Midcap Growth Fund. McHugh, whose performance was boosted by a big position in the chip-equipment group before he bailed out in October, has a hot hand. His fund's 40.6% return in 1997 earned him recognition as one of Morningstar Inc.'s Rookies of the Year. The way he sees it, weak chip prices, currency devaluations in South Korea, and delayed orders will keep the semiconductor-equipment makers in hot water for a long time.
EDITED BY LARRY LIGHT & ROBERT McNATT RELATED ITEMS
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Updated Jan. 22, 1998 by bwwebmaster
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