WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 160.04

+5.2%

Nov 5 3:59 PM EST

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To: Jim Greif who wrote (10182)	4/10/2000 9:29:00 AM
From: Ausdauer	Read Replies (1) of 60323

Jim, Thanks for recommending the article in Money magazine. I ordinarily do not peruse this periodical and would have missed the information there altogether. The issue you are referring to has several nice articles including the piece on "Investing in the Post-PC Era" that mentions both SanDisk and SmartDisk. The author tries to grapple with valuations. There has been recent speculation on this board about where SanDisk's stock price is heading. As my post-split valuation of $75 for 2000 has already been exceeded, people probably won't put much "stock" in any further predictions I might make. Clearly, when we were sitting in the upper $90's just before Q4 1999 earnings it was safe to assume our valuation was still in line with reality given projected 2000 earnings were in the $1.15 to $1.20 range. Subtracting cash/cash equivalents of about $6.00/share we were probably trading at a forward PE multiple of 75 or so. Currently, based on post-split 2000 estimates of 80½ a share and a stock price of $116 on Friday we are looking at an forward PE of 130 to 140, or somewhere in that range. At Tuesday's nadir of $70 we were trading at a PE of about 80 based on similar earnings projections. This is especially surprising given the fact that this downturn came in the wake of the Lexar Media decision. It represented an incredible buying opportunity for SanDisk. I read this morning on Yahoo! that Robbie Stephens is changing their estimates for SanDisk for 2000. I would take this post with a grain of salt given the dubious source (a Yahoo! message board)... messages.yahoo.com *SanDisk is on track to strongly exceed our estimates,* said Niles and Chanda. "We are raising our first quarter 2000 revenue estimates to $104.9 million and our earnings-per-share to $0.37, from $92.7 million and $0.33, respectively. We believe there is significant upside potential in revenues as well as gross margins. In addition, we are increasing our six-month price target to $200." BTW, Jim, the articles just before and after this segment ("How to Play the Wild Market" and "This is Your Future Calling") were also worthwhile reading. Ausdauer

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