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Technology Stocks : WDC/Sandisk Corporation
WDC 157.80-5.0%3:41 PM EST
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To: DaveMG who wrote (8777)1/24/2000 6:31:00 PM
From: Ausdauer  Read Replies (1) of 60323
 
Dave,

But do you really still think SNDK is cheap? When I look at it's mkt cap it does indeed seem cheap compared with the size of the opportunity, but PE and P/sales are another thing, unless of course one looks at the world from the POV of a relativist, ie "JDSU trades at a PE of X so I don't see why SNDK can't trade at Y".

I am struggling with this same concept. I agree totally with you that SanDisk "seems cheap based on the size of the opportunity". If you start applying PE's, P/S ratios or strict valuations you can end up talking yourself out of SanDisk.

I think the size of the opportunity is huge. We got caught with our pants down somewhat because the fabless model was outgrown before alternatives could be worked out. Now it appears if major capital expenditures are needed to bring production in step with demand.

I am still o.k. with SanDisk's valuation. I bought shares during the October tumble (starting with a small lot at $77 and then weighted lots all the way down to $40) and again when we dipped into the mid-60's a few weeks back.

I wish we could fast forward about 18 months to see how the JV is working out and to examine SanDisk's execution during this transition period. But if I could see 18 months in the future then I wouldn't have to guess at investing at all.

Ausdauer
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