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Politics : Formerly About Advanced Micro Devices
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To: kapkan4u who wrote (61938)6/16/1999 1:55:00 PM
From: Charles R   of 1573984
 
Kap,

"A company with 0% growth and no dividends does not deserve a P/E of 30+. Even a hint at slow or no growth will send Intel's P/E into 15- territory. Which by the way is close to the historic average for INTC."

I am generally in agreement with you here. One thing though - this bull market has put high valuations on a lot of companies, quite a few of them undeservedly.

Also, we may have a different definition of "valuation time bomb". The only companies in the semi biz that fit that metric for me are the companies that are trading at PEs well over 50 (TXN, BRCM, RMBS, MU, PMCS, TXCC, AMCC come to mind). Not that PE over 50 is by itself bad but the penalty for a downturn in business is huge. Semiconductor companies have routinely lost 50% value or more in a year in the last 10-15 years, so a company losing 50% market cap in any given year is almost a non-event.

Chuck
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