Cardin Drake and Thread,
I like the fact that someone has taken the time to look at some rough numbers for the next quarter. The analysts have determined that moving 2000 estimates from $1.15 to $1.50 is in order. Factoring in current cash holdings and cash equivalents/investments, an additional 5 million shares in the float from the secondary, and the closing price from Friday I estimate a forward PE of 60 to 65. Thus, if we split around the 120 level and growth projections are met we can expect a year end share price of $75 (split adjusted) using a PE of around 100.
SanDisk achieved nearly a quarter of a billion in total revenues this past year and have their sights set on total revenues in the range of a half billion for 2000. CompactFlash is in high demand as digital photography is entering Main Street, USA (see my post from yesterday). As Eli said, "Digital photography is now on Main Street, but it is still on the first block." Superimpose the pent up demand for MMC on top of the unit sales projections for digital cameras for 2000 and you will see that a doubling of total revenues is well within SanDisk's reach. As the year progresses look for mock ups of the SD Memory Card along with help from Toshiba. By the time security/copyright/distribution issues for the Internet audio market gets hammered out the demand for SDMC will be astounding. Looking forward still, we have the nascient web-enabled, mp3-enable cell phone market to spark future growth.
I remain very optimistic about SanDisk's growth potential. Cardin, as you have outlined below, EPS could increase substantially for Q1 of 2000. Recall that the company received a late shipment of wafer from UMC to compensate for the work-in-progress destroyed in the original quake. This could not be processed in time for Christmas, so Q1 may be favorably impacted. Also, I would like to ask someone on the Thread how the $460 million in cash and investments will impact EPS. I expect the "other income" line to increase as SanDisk likely has significant holdings in short and intermediate term bonds. Interest rates may move up soon, but I believe that SanDisk has positioned itself nicely with regard to raising sufficient capital to fund near-term expansion. This may sound counter-intuitive, but SanDisk may actually benefit from small upward adjustments in interest rate hikes.
Please also recall at least $2.50 per share in one-time income to be reported based on the $200 million gain on the USC/USIC investment.
Guestimate on operating expenses for Q1- Increase from 20.6 to 23.
Operating Income = 41-23 =18
Interest and Other Income = 3.7 (Leaving it unchanged)
Income before taxes 21.7
Provision for taxes= 7.2
Net income for Q1 = 14.5
EPS=.43
Would someone on the Thread with a background in finance comment on strategies for manangement of cash and investments?
Ausdauer |
