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Technology Stocks : Rambus (RMBS) - Eagle or Penguin
RMBS 88.13+1.0%Nov 21 9:30 AM EST
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To: TST who wrote (24946)7/16/1999 5:49:00 PM
From: Richard Habib  Read Replies (4) of 93625
 
TST, anything is possible. My trading style usually requires a significant "value" component. While you may argue RMBS as a value play based on future growth, I'd argue the street may fool you. Since future RMBS growth at the end of the ramp becomes effectively equal to DRAM growth - as perverse as it sounds, I could see PE declining as rev ramps as the street looks to that DRAM limited future. Three other points. I don't use the Dataquest DRAM market numbers that Unclewest uses. They are completely out of this world when compared with other DRAM market analysis. Second, I'd point out that if you compare DRAM forecasts with historic DRAM market sizes, you'll find forecasts are consistently optimistic. Third, unlike Unclewest who states the Dataquest numbers and then points out that the PC market is only 1/3 of the RMBS future - I'd argue that the DRAM market numbers are the DRAM market and includes all DRAM sold. Whoever you believe regarding market size - that is the total DRAM market not just the PC market. My 3 assumptions lead me to the conclusion that future earnings are far lower than the numbers you are using. If the street is perverse regarding PE as noted above, RMBS may not have a great deal of upside - at least not like the kind of numbers you mentioned.

Having said all that I'm glad for the longs. I do trade mostly options so my criteria are quite stringent. I did put my sister into RMBS ordinary shares at 70 so I'm glad to see the stock at these levels. Rich
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