Found this on AMAT...
ragingbull.lycos.com
Text of message reads as
"Sales down 50+% & still a bubble
From their Yahoo Profile-
“Applied Materials develops, manufactures, markets and services semiconductor wafer fabrication equipment and spare parts for the worldwide semiconductor industry. For the 13 weeks ended 1/27/02, revenues fell 58% to $1 billion. Net loss before accounting change totaled $45.5 million vs. an income of $424.2 million. Revenues reflect the slowing worldwide demand for semiconductors. Net loss also reflects a $77 million restructuring charge””./////
Price per share $23.7 (5/10/02)
Sales: $6 bn (last Qrt: $1 bn Down58 %- next Q est $900ml)
Market valuation: $38.9 billion
Company Valued at 6.9 years of sales, (based on last Q: 10years of sales)
# shares outstanding: 1.64 billion (a lot)
Total industry world-wide sales of semi-equipment last year were $28 billion, yet Applied Materials market cap is $41 billion."
QUARTERLY REVENUE in millions-(from Multex)
With amount of Increases or (Decreases) from PREVIOUS QTR %-
-Quarters ending-(4/30/02 per estimate)
4/30/02: $900ml- Decreased- $100ml or 10%
1/27/02: $1,000.0- Decreased- $736.7 or 42.4%
10/28/01:$1,736.7-Increased- $402.8 ml or 30% (Yahoo shows sales of $1,368 ml)
7/29/01: $1,333.9- Down $575 ml or 30%
4/29/01: $1,909.4 - Down- $454 ml or 19.2%
1/28/01: $2,363.3- Down $557 ml or 19% (Yahoo shows sales of $2,731ml)
Deceases in sales from the Year ago Quarter-
4/30/02: $900ml- Decrease of $1,000ml or 52%
1/27/02: $1,000.0- Decreased- $1,363ml or 58%
How can anyone justify paying $38.9 bn for a company with $4-5 million in sales (decreasing), no profit and no growth.
There is no basis to justify this type of valuation on AMAT or any other stock. These types of valuations have ended, just look what happened to stocks like YHOO, MSFT, CSCO ,EXTR, FRDY, SCMR, SUNW, EMC, etc, these are good companies and were cut as much a 95+% from their highs.
AMAT’s Current and projected sales and earning (loss) do not support the current price. In reality investors are ANTICIPATING a certain FUTURE years away and are PAYING for this NOW, hoping and GAMBLING that CERTAIN EVENTS happen (large increases in sales and a profit).
When a stock is A GOOD INVESTMENT it is a stock in which the potential is NOT YET REFLECTED IN THE PRICE- with AMAT, EVEN THOUGH IT IS DOWN FROM ITS HIGH, Longs are still buying a "Bubble Valuation", with more than a perfect future being priced in. The stock is priced to "perfection" many years ahead of itself, a perfection that may not be attained.. "
The words "..$4-5 million in sales (decreasing)" should be corrected imo to "$4-5 Billion in sales (decreasing)" but you get the point.
Oh the myth of early-cycle companies (rather early-cycle STOCKS) such as these.
Like all else and even technical analyses, the more folks follow something the more it 'SEEMS' or turns out to be 'true'.
Disclosure: Am not short AMAT but wish my company would be treated as such.
i.e rewarded for being in a decline, all because of momentum stock-price action which have nothing to do whatsoever with representing fractional pieces of a company. |
