Bill;
The most common way to measure a semi equip I believe is P/S ratio. Historically, if a company has done well in both growth and profitability, as Mattson would if these targets were hit, we would see as PSR of 3-4.5 at the cycle peak and about 1 during a normal cycle bottom. You might see a "forward" PE of 10, but if that was taken as a snapshot for Mattson in 2001 for 2002 before a downturn was foreseen, the resulting stock price would be even larger by that method. I think you may be expressing a reasonable method for valuation at a cycle peak, but the market has almost always went way too high in the peak and way too low in the bottom. The ratios tend to hold fairly true. Graphs of this over time are often posted on the AMAT thread. AMAT, of course, being an 800# gorilla, tends to run a higher ratio in both the highs and lows, with the low not being as severe.
Best Regards,
John Stewart |
