Applied Materials No-Politics Thread (AMAT) Message Board

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Technology Stocks : Applied Materials No-Politics Thread (AMAT)

AMAT 323.18

+1.6%

2:19 PM EST

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To: BWAC who wrote (6741)	8/13/2003 12:34:44 PM
From: Return to Sender	Read Replies (1) of 25522

Great post! >Let me remind you. Take the 5 year period of 1998 thru 2002. AMAT average earnings (without charges) was 55 cents per year. This included the bubble and the bust. Average was 55 cents. That is approx a 35 PE right here. When AMAT hits $55 this cycle it will be a 100PE on average. When it hits $12 in this cycle it will be fairly priced and safe to buy long term.< I'm very cynical myself. Those were average earnings of 55 cents per year factoring in a total boom cycle 1998 to 2000 without the actual cost of stock options factored in. Without the company paying even as much as a small dividend to investors. Last night AMAT missed on revenues, lowered guidance but today CIBC raises the stock target to 27. Now I am not at all backing off on my thought that AMAT will trade back near 20 again soon but my question is why? What if AMAT has to expense options? Does that cut future earnings by 25% or more a year? I think it does. What if investors finally realize that the capital equipment industry is not a growth industry but a cyclical industry and demand a dividend? What if investors stop chasing analyst's recommendations and simply assign the same kind of valuation to high tech stocks like AMAT that we do to automobile manufacturers or the company that builds equipment for their assembly lines? A lot of what if's that will eventually be some of the excuses that take the stock back to 12 but first perhaps we will see the high 19's or perhaps even dare I say it... 27 RtS

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