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Technology Stocks : WDC/Sandisk Corporation
WDC 163.00-0.4%Nov 7 9:30 AM EST
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To: Tumbleweed who wrote (11924)6/12/2000 6:25:00 PM
From: Steve 667  Read Replies (2) of 60323
 
Hi Joe,

Yes, very good questions. First regarding P/E ratios. SNDK earned .55/shr last 4 quarters so the P/E (yesterdays close) is 136. (not a typical value investor stock :-)

By contrast SSTI earned .50/shr so the P/E (yesterday's close) is 194.

So if we take the average P/E of 160, and earnings estimates are correct for year 2001, then in 2001:
SNDK will be $201 /shr and SSTI will be at $561 /shr

If the P/E of both drops to a mere 50
SNDK will be $79 /shr and SSTI will be at $175 /shr

If the P/E of both companies remain as they are now,
SNDK will be $171 /shr and SSTI will be at $680 /shr

This is with everything else being equal. As you mentioned, either stock could stumble, and many things could happen between now and then.

As for percentage of portfolio, I was talking about reallocating whatever portion of ones portfolio that is now in SNDK, and taking some or all and putting it in SSTI. This would keep your portfolio in the same ratio of flash memory stocks as it is now.

This is all food for thought, but I am still trying to figure out, just why SSTI provokes so much higher earnings estimates. (7 fold in less than 2 years). Must be something.

for reference:
Message 13847689

Steve 667
Sandisk.....Big memories in small packages
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