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Politics : Formerly About Applied Materials

AMAT 252.25

+0.9%

Nov 28 9:30 AM EST

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To: Cary Salsberg who wrote (45675)	4/20/2001 6:51:09 PM
From: Cary Salsberg	Read Replies (1) of 70976

FWIW: sold @ 51, shares of XLNX purchased recently @ 34 and 31; sold @ 27.95 and 27.97, shares of JDSU purchased recently at 17.5 and 18, respectively. OBJECT LESSON: XLNX reported $.19 EPS. Annualized, that is $.76. My $51 sale price gave it a 67 PE. XLNX predicted a 15-25% sequential sales decline next quarter. If we assume 20% and a proportional earnings decline, we get an EPS of $.15, annualized to $.60. Based on $.60 my $51 sale price gives it a 85 PE. XLNX has a long term growth potential in the 25-30% range. Yahoo research predicts 27% over the next 5 years. 67 to 85 is a high PE for a company expected to grow 27% and is unusually high when the company's growth is currently negative. How high will the greater fool theory drive it?

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