Morning Bob,
If Clowns did research, this is what it would sound like. Why is Cramer obsessed with dividends? I cannot believe that people actually pay for this garbage. But for all of the time he spends villifying AMAT, my guess is that he would love to get a boatload.
Applying Real Research to Applied Materials
Thursday November 14, 8:01 am ET
By James J. Cramer,
We currently rate Applied Materials a 4-4 and we heard nothing last night that makes us feel any better about the stock. In fact, even as we knew things were bad, they turned out to be far worse. We have been way too optimistic thinking that orders would fall 10%. It's twice that. Continue to avoid it. Avoid it with extreme prejudice.
One day we are going to get research that is as right as that piece above in all its "research-ese." It won't claim "the bottom is here." It won't say "things can't get worse." It won't tell you that you have to "buy these kinds of stocks when everything looks bad because if you had done that in a previous cycle, say 1984-85, you would have been wiped out in a very short time and the goal, of course, is to stay in the game no matter what."
But instead we will be greeted once again with a mix of holds and buys and probably catch an upgrade somewhere based on the idea that things can't get worse -- that, and it would probably please some of the mutual funds out there to hear something positive.
Of course, there are plenty of positive benchmarks that could mislead you here. Applied Materials (AMAT:Nasdaq - news - commentary - research - analysis) is cheap on 2005 numbers if you believe that there is a cyclical snapback. It's cheap on 2007 numbers if DRAMs roar back. On 2010 numbers, I can make a very compelling case for the stock.
Similarly, if I cared about book value in tech, it looks mighty interesting as a book value play, but that's never made me a dime in tech. Finally, as a potential dividend play if we get dividends, the stock certainly makes some sense in 2005.
But otherwise, Applied Materials stinks.
Why doesn't anyone write that? They do. I just did. And maybe that will embolden some of those richly remunerated analysts to at least consider the possibility that Applied Materials isn't going to be a good stock within the time frame of every single investor out there.
Then again, it probably won't have that effect. |
