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Politics : Formerly About Applied Materials
AMAT 341.36+1.3%Jan 29 3:59 PM EST
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To: Paul V. who wrote (13696)12/19/1997 10:08:00 PM
From: Tito L. Nisperos Jr.   of 70976
 
Paul V,

Historically, AMAT's PE range from over 50 to 4; in the last downturn the PE was less than 7 even though the company was reporting more than double the earnings of the previous year. Investors in general look at PEs but disregard them if they think the prospect for the next 6 months is bleak.

We can guess on what possibly could happen to the stock's price based on what happened in the last downturn:--- The stock came from the high at 60 to the low at 30; then back to 55 only to turn back to 30; then rallied to 40 before settling for a while at 30. The company was doing well at those times---reporting more than 100% improvement in earnings from the previous year. 30 was the support, a 50% decline from the high...Then when the company did not meet earnings expectations and warned Investors of slowdown on Push-outs, Investors drove the stock down to the low 20s, a decline of 63% from the high...The stock hit the 50% decline in price recently at 25 1/2---at this time when the company is still reporting Good earnings; when the company hints on Push-outs, we could see the stock at 20 (63% decline from 54 3/16)...Previously, it took the stock 1 year to glide to the bottom; something more serious is going on---the stock crashed in a month (45% decline) then, 3 months more and it got the 50% decline; so scarily fast!...
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