Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 223.95

+1.7%

Nov 21 9:30 AM EST

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To: Alastair McIntosh who wrote (38659)	10/24/2000 8:40:41 PM
From: Proud_Infidel	Read Replies (1) of 70976

Alaistair, At different points in the cycle, different methods are typically used in valuing SCE stocks. During downcycles, when little/no earnings are made, using PSR or Price/Book is necessary. Because these companies have earnings now, and should continue to do so, EPS is primarily used. It should be noted also however, that prior to 1999, AMAT's highest net margin was 15%. We are now more profitable than ever with NM's of 21%. Rarely will the market not realign valuations when there are improvements in the business such as we have seen in AMAT over the past 5 years. When you add to this the fact that AMAT is now in more markets, with increasing market share, I find it difficult to believe AMAT will return to its old valuation range. IMO, Brian

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