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A Closer Look At Orbotech


BusinessWeek Investor -- Inside Wall Street

A Closer Look at Orbotech

Guilt by association: Woe to any company that gets lumped--rightly or wrongly--with a sector out of favor on the Street. Take Orbotech (ORBK), mistakenly associated with the besieged makers of semiconductor gear. Orbotech has dropped 30% in recent weeks, to 46. Never mind that Orbotech does not make semiconductor equipment: It was punished nevertheless. Orbotech makes optical inspection equipment for printed circuit boards (PCBs), flat panel displays (FPDs), and electronic assemblies. Orbotech's tools are used by manufacturers of electronics products to make sure they maintain high quality standards.

The drop in the stock "presents a buying opportunity," says Victor Halpert of Salomon Smith Barney, who has raised his rating on the stock to a buy from "outperform." He thinks the stock is worth 70. "Unlike the semiconductor space, the PCB and FPD markets are forecast to remain strong," he says. He sees earnings of $2.20 a share in 2000 and $2.47 in 2001.

Orbotech chief financial officer Amichai Steinberg says business prospects are good. He expects sales to hit $1 billion in three years. One source of growth: China. "Orbotech has set up the infrastructure to operate in China," he says.By Gene G. MarcialReturn to top

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