Art, a lot of "value" oriented people I meet on the MDD thread will tell me it make no sense for a company with $330 MM TTM sales, or even $450 MM FTM sales to be valued at north of $4 billions. I do not always agree with them, but right now, the market is listening to their voice more than to mine. Bear markets make no sense at all, but they do happen, and in a bear market (which I do not expect until much later this year and probably more like early next year) all valuations measures are decimated.
Art and Aus, you two and many others on this thread are dedicated long termers in this stock, but sometimes it make sense to ask oneself under what conditions do I change my mind on this (or any other company). Art wrote last week that the fair price for SNDK is $150 taking If memory serves a 100 PE on next years earning of $150, well, the market general valuations by next year may not support PE that were "justified" in the dot.com era. Of course, if Greenspan manages to get the economy back into "goldilock" mode, liquidity once more may chase stocks to extreme measures of valuations, but I do not know if indeed that will happen.
Sometime in the next two years (and I believe much earlier than most) we will have a peak in the semi cycle. I have no idea how bad the bottom of that peak will be, but with that peak, money is going to flow out of the semi into whatever might be still on an ascending curve, under such circumstances, even if sales continue to grow at 50% per year, I can assure you that the highest PE accorded to a semi will be about 80% of its growth rate, thus a PE of "only" 40 according to our working assumptions on this thread.
I am on record (which really means very little, just a general personal "rtoadmap") as stating that the peak for the semis is about 2 to 4 quarters away and for the semi caps, probably less and possibly reached (my signal fro semi caps will be AMAT breaching $82).
Zeev |
