RE: "What are your targets on your chosen companies?"
I suggested the following plan for the last upcycle:
1. Estimate peak sales and earnings and derive a peak price based on historical peak PE.
2. Refine the estimates as the cycle moves closer to the peak.
3. Sell when the market discounts the peak.
This is still my plan for SCE (semi-equips). The semis, ALTR, XLNX, LLTC, MXIM, require a variation because they are not necessarily cyclical in the sense that revenues are certain to fall.
My plan for the semis:
1. Estimate a high initial growth rate when the economy takes off.
2. Estimate a steady state growth rate after the "take off" period.
3. Refine the estimates as the recovery proceeds.
4. Sell when the market discounts significantly higher growth rates than are predicted.
The semi-equips must be sold, but the semis may not be.
I tend to use AMAT estimates as a guide for the other semi-equips. I will wait for significant improvement before I attempt numbers for all 4 semi-equips.
I believe that the semis, ALTR, XLNX, LLTC, MXIM, will double in 2 years (40% growth) during the "take off" and that "steady state" growth, 25%, will cause a double in 3+ years.
I believe that refining the estmates and executing my plans are keys for success when times get good. |
