When the next quarter is reported the I expect the valuation picture to improve. Of course everyone does so when you look at the stock price you have to ask yourself how much is already baked in?
Sure, that is the question. If you believe, as I do, that they will make a minimum of $2 next year, more likely much closer to $3, and possibly over $3, then no, I don't believe that that is baked into the current price of $14. I don't even think that the current estimate of $1.79 is baked in. Don't forget that the estimate was just .99 a couple of weeks ago, and I think .79 a few weeks before that.
I think that there are a lot of skeptics out there as well as a lot of people who haven't looked at the Elpida deal, or just dismiss it by saying "Elpida was in bankruptcy last year" or "Elpida is a dog with fleas," and "How can two lousy companies make one good one?" Yes, DRAM has been a horrible sector for everyone but Samsung for the last 10 years. But it is a different environment now, Samsung isn't trying to chase everyone out of DRAM now, they are trying to chase everyone out of smartphones and tablets, and for that a higher DRAM and a higher rather than a lower NAND price helps them. But of course the macro environment must remain positive, we'll have to see if that will be so.
At any rate, I said that was enough in the previous post, this really is enough now. I am done for the night. |
