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3/25/2010 1:45:03 PM Eastern Time

A Friend Like Ben
By Charles Payne, CEO & Principal Analyst

Helicopter Ben is lifting the market today after saying the economy continues to require the support of accommodative monetary policies. I think we are looking at 2011 before the Fed takes action and while that thrills the market it means inflation could be a really big problem down the line. But, that's down the line, right now it's all about letting the good times roll. Bank stocks are leading the charge which should make some old school investors feel better although light volume continues to send a contradictory signal. Needless to say if lack of volume has prohibited money managers from jumping into the pool they may stubbornly stick to their guns. In the same booth are those in the doomsday crowd. The task today is to understand the message from the banks.

Bank of America (BAC) is going to lower principal for certain mortgages that are deep underwater. This is a move I've wondered why more banks haven't done until now although I understand how it can be like opening Pandora's Box. I might call my bank after I finish this report even though my house isn't underwater. I worry the plan could be pushed onto banks that are reluctant by the government. Although some of the numbers make sense for Bank of America, if a bank doesn't want to go this route it should be their right. Still, the news seems to have energized bank stocks in general and B of A in particular. Interestingly I think momentum on financial regulatory reform is helping bank stocks too.

The new rules will cost businesses and consumers more and make getting credit more difficult but any resolution would be welcomed after a year of threats and browbeating. Citigroup (C) is the clear laggard but building momentum.

On that note the bond auction didn't go so well today as the yield was high and the bid to cover was lower than the average. It doesn't matter that $32.0 billion was raised. In addition, news broke of a deal between France, Germany and Greece involving the IMF. I don't have details right now but this brings America a little closer to this debacle. So far it seems that France and Germany agree on a plan that would include "substantial contribution from the IMF," however, the President of France, Nicolas Sarkozy, was one of the biggest opponents of using the IMF to help bailout a fellow European Union member.

Long Idea: Kulicke and Soffa Industries, Inc. (KLIC) @ $7.47
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Trading Parameters
Entry Price	Entry Limit	Stop Loss	Trading Target	Target	Long-term Target	Options
$7.47	see comments	$6.50	N/A	$9	$9.50	N/A
Options Trade Parameters
Type	Option Symbol	Entry Price	Strike Price	Expiration Date
Call	KQS100717C00007500	$0.95	$7.50	7/17/2010

BACKGROUND: Kulicke & Soffa is a global leader in the design and manufacture of semiconductor assembly equipment. As a pioneer in this industry, K&S has provided customers with market leading packaging solutions for decades. In recent years, K&S has expanded its product offerings through strategic acquisitions, adding die and wedge bonders and a broader range of expendable tools to its core ball bonding products. Combined with its extensive expertise in process technology, K&S is well positioned to help customers meet the challenges of assembling the next-generation semiconductor devices.

SKINNY: Our long Hotline idea is Kulicke & Soffa Industries Inc. (KLIC) as we were very impressed with KLIC's most recently reported quarterly results as it was able to significantly beat on both the top and bottom lines. Putting the icing on the cake, management provided a revenue forecast for the March quarter in the range of $140 million to $150 million, which represents growth of approximately 16% sequentially, while the Street expected revenue of $101 million. We believe revenue growth will continue well into 2011 as the Company ramps up sales of its heavy-wire wedge bonders (from its Orthodyne acquisition) and die bonders. Demand for power management component, which use heavy-wire wedge bonders, stand to boost revenues for KLIC as power efficiency becomes more and more critical. Longer term, the Company also stands to benefit from a replacement cycle of its bonders, which is likely to begin in 2011. We see shares of KLIC moving to $9.00 and then to $9.50; use $6.50 as a mental stop loss.

Analyst Coverage
Jefferies & Co- Initiated BUY