Larry, I'd certainly like to know how that source estimated 28 percent annual growth in earnings. I would want to see a breakdown in earnings from chip sales and earnings from royalties. I'd also hope to see something more than a mere straight line with no underlying assumptions. I'd also like to see if those estimates include any adjustments for gains in efficiency, productivity, etc., all of which are occuring regularly. I'd also like to know if the earnings estimates account for the expected earnings from the new plant in Manassas, Virginia. Once that plant is up to steam, my CONSERVATIVE estimate is that the portion of the production allocated to SanDisk will more than triple the current level of earnings from flash memory sales. That's not a hunch, but is based on production volume in a period of very fast growing demand. The only thing I'm not assuming is that the prices of each unit will increase due to the demand. The reason I'm not assuming this is that there is enough competition to force prices down, at least per megabyte.
Larry, anyone who relies on fundamentals DOES listen to management as carefully as the analysts do, if not in direct conversations, then through the financial statements, which are, after all, management talking. TA's do not have a monopoly on the use of probability in estimating future prices.
Art |
