Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 223.95

+1.7%

3:59 PM EST

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To: Alastair McIntosh who wrote (55142)	11/6/2001 6:59:28 PM
From: Jacob Snyder	Read Replies (2) of 70976

How about: (cyclical peak earnings of $3.50 in 2004) X (PE of 20) = peak stock price of 70 in 2004. That would indicate we have less than a double, in potential gains, from here to the next cycle peak. The PEs get distorted by the cyclical nature of the industry, so forward and trailing 12M earnings aren't very useful yardsticks. And, at the troughs, earnings disappear (using non-imaginary non-proforma numbers). In the 1998 trough, I got only a partial position, as I was expecting a trough PE of 1, and we "only" got as low at 2.2. I agree, valuations in AMAT and a lot of techs, are once again starting to get stretched. Two more of my limit sell orders were reached today (in other stocks), and it would have been 3 if AMAT had reached 40. Nothing is anywhere near my buy-points (although I'm hopeful of getting some QCOM at 45 and 40 soon, given their miss and warning).

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