Brooks Automation (NASDAQ:BRKS) -- Shares "Smacked" Down on Analyst Downgrade
In a previous position at a technology publication we closely followed companies like Brooks Automation, due to the automation, vacuum, and instrumentation solutions it provides to the semiconductor and related industries. So, today’s recent Citigroup analyst downgrade caught my eye. The negative perspective resulted from chip inventory that may be building up too quickly based on seasonal trends, and greater than expected capital expenditures early this year.
However, Agora Financial editor Chris Mayer, reporting from New Zealand, has another read on the situation:
“I’ve been following the market avidly here, along with the rest of our investor-minded group. (As I write this in the hotel bar, it’s Monday afternoon and they are watching the Saints-Vikings game. We’re 18 hours ahead of East Coast time back home.)
“It looks like we may finally have our much-needed correction here, which may create some new bargains for us. In the meantime, I have a few updates on our existing holdings…
“The market smacked the shares of Brooks Automation (NASDAQ:BRKS) after a Citi analyst downgraded a whole bunch of chip stocks to sell. The analyst, Timothy Arcuri, sees a 30% drop in the next three-six months. Nice crystal ball you got there, Arcuri.
“We bought Brooks because we saw the potential for big gains as a turnaround in the chip sector took hold, and, in particular, as the turnaround at Brooks gained traction. I intend to let that scenario play out … If we are wrong, we ought to be OK anyway, because we bought the stock so cheaply — unless some sort of unforeseeable disaster strikes. There is always an element of luck in speculating on stocks.”
Chris pays attention to special investment opportunities, such as the turnaround in the chip sector he mentions above. You can learn more about his recommendations by visiting Agora Financial’s reports page.