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Technology Stocks : Semi Equipment Analysis

SOXX 306.28

-1.0%

Dec 4 4:00 PM EST

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To: Alastair McIntosh who wrote (6645)	11/3/2002 12:08:22 PM
From: Cary Salsberg	Read Replies (1) of 95526

I appreciate your analysis. Well conceived and presented. I checked Yahoo for current shares outstanding and got 1.65B. $7B divided by 1.65B = $4.24 revenues/share. A 20% after tax profit margin gives a EPS of $0.85. A 20 PE and a PEG of 1 are pretty conservative for an industry leader with a 20% annual growth rate in this low interest rate environment. If one believes that AMAT will go from $7B in 2004 to $20B in 2007-8, then one is willing to pay higher prices. A 30 PE and a PEG of 1.5 on $0.85 gives a price of $25.50 in 2004 and a move to $20B sales gives a price of ~$73 (in my ballpark $55 to $83 in 2006). My buy range for AMAT since the beginning of 2001 has been $12.50 - $20.00. I think we are just stating both optimistic and conservative valuations. I think we have established a good "ballpark" which investors can adapt to their individual temperament.

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