Joe,
Sorry that my post came across as "uncivilized". I have seen too many short sellers sprouting rumors and illogic, trying to affect the stock price in their favor.
I agree that contrarian views should be welcomed (but also debated!) Let's take some of your points:
1), 2), 4) no arguments here.
5) I think the last earnings report and conference call led most people to believe that AMAT "is at the bottom of a business cycle getting ready to explode." Unless there is good reason to believe otherwise, I would trust AMAT management.
3) 6) 7) If you are talking about a short-term top for the stock price, then this might make sense. AMAT may not have another big jump until the next earnings report approaches. However, IMO, it is a mistake to look at the TRAILING PE ratio, especially when AMAT is coming out of a cyclical bottom. As has been said many times, the market always discounts the future. If you look at the PE on estimated '98 earnings, AMAT's PE is 69.5 / 3.85 = 18.05. For INTC, it is 169.25 / 10.50 = 16.10 . Keep in mind that AMAT fiscal year ends in October, so if you normalize it, AMAT's PE would be closer to 17. I also think there is more expectation for AMAT's earnings estimates to be raised than INTC. Plus, there is the evidence/perception that AMAT is taking market share away from the smaller competitors, while INTC can only lose market share to the smaller guys.
8) With as many customers as AMAT has, and given this near-bottom environment, one would expect to see SOME push-outs/cancellation, and SOME pull-ins/new orders. The real question is what is the overall outlook? Again, I would go with what management has stated. Given their backlog, I would bet that AMAT can meet the next earnings concensus estimate (especially when they gave the guidance!)
In the short-term, just about anything can happen to the stock price, and one might try to play the swing. But do you really doubt that AMAT will be higher a year from now?
Looking forward to any further debate,
TB |
