Nearly all the semi-equips lost value this week - some much more than others. Overall, the group of 34 stocks I follow lost 13 percent for the week. The results are tabulated at:
Message 13786766
Then I decided to run a little analysis of how far down each stock was at today's close compared to its highest price attained this year. From Zacks, I obtained the latest earnings estimates for this year and next year for each stock. I was surprised to find out how many stocks in the group had revised upward earnings estimates during the last couple of weeks. Some of the revised upward earnings estimates were substantial.
Two things happened then this week. First - many stocks lost 10 percent or more in value during this past week, and second - the earnings estimates of many stocks have increased lately. Putting the 2 factors together, and calculating "next years PE", gives quite a "picture" of the relative value of each stock in the group, as well as the value of the group itself. The new next year's PE for the group is 17. This is found at:
Message 13786822
The same data is shown in the following post, but in this case the sort is done by next year's PE.
Message 13786851
From a valuation point of view, the group would seem to be desirable. How long it will take to be recognized to instigate a rally is unknown. More losses in stock prices will only make the earnings numbers even more attractive.
We have all heard opinions from various experts on where we go from here. I have heard it expressed on the TV business news channels that the last stage of a bear market is when the 800 lb gorillas of their respective sectors finally give way. In our case, that is AMAT. Today, It closed down 35 percent from its 2000 high of 114.88. It may have to go much lower before this bear market has run its course. I have heard that support exists in the 58 to 60 area for AMAT if it breaks through the 68 to 70 area. An AMAT close at 58 would give a loss of 50 percent from its high for this year. It would also result in a next year's PE of 18 for AMAT. Certainly an area from which a rally could be successful.
Next week ought to be very, very interesting. Either a bottom can be formed in some fashion without too much more deterioration of prices, or more grief is in store for all stocks including AMAT and other sector leaders until a bottom is found. Many people also think the NASDAQ will fall to the 2900 area. Personally, I am on the fence about what is going to happen. I think it could go either way.
Don W. |
