Wednesday, January 10, 2007

FORM: Moving On Up

Shares of FormFactor (FORM) experienced a decent pop today as a result of analyst ratings and comments. As of today, FORM has taken over the #3 spot in the Long-Term Portfolio, behind #2 Student Loan (STU) and #1 Altria Group (MO).

Well, I might as well post the basic comments that led to the jump today. I know of three different investment firms that gave their views today on FormFactor. Two were clearly bullish, and the other was much more cautious.

AG Edwards - The firm initiates coverage on FORM with a Buy rating and $50 price target. They are believers that FormFactor's wafer probe cards will offer semiconductor manufacturers a cost effective and yield-enhancing solution for the testing process.

CIBC - Based on anecdotal data from Korea, increased wafer probe card demand should benefit FORM. They believe that the raw increase in DRAM bits coming out of Korea have eliminated any downside risk to first quarter estimates. And, a potential large positive catalyst would be the closing of a long-term supply contract for flash memory with Korean-based Hynix. CIBC called FormFactor their Top Idea for 2007.

Friedman Billings Ramsey - The firm cut their estimates on the latest quarter, and also reduced their price target on shares from $55 to $50. The firm cites high DDR II prices, an inventory correction in the high-end handsets market, and also lack of any major volume orders on flash. They believe that this could impact margins and potentially cause a Q/Q decline in bookings.

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