Let the fun begin!
I suspect these strong orders for Sept explain the rise from $20 only a month ago.
I'd be interested in comments from others on this calculation I did. It shows the revenue level LAM needs to match former profit peaks. Bagley said he thought they would improve even more on this model and will update us in the next conference call. That will probably raise my targets calculate below. (This is from my newsletter):
Bagley gave the following numbers during the 7/23/03 Earnings conference call:.
When ===== Quarterly ======
Revenue Profits Per Share
March '01 Peak $465M $88.6M 48¢
Next Cycle $385M $88.6M 48¢
Assumptions:
* Said profit expectation will get even better with next iteration of model to reflect further cost cutting.
* Cost savings come from outsourcing of mfg.
* They are taking market share so they could match peak revenue without the market hitting old highs.
* Assumes same tax rate and same number of shares.
If you assume $2 a share earnings per yr and a P/E between 20 and 40 it gives $40 to $80 price target. Currently LRCX is estimating 1 to 3¢ for next quarter. This tells me that I want to take some decent profits around $40 with expectations that the stock could get to $80 or even higher if they continue to take market share.
If we get a long, slow recovery as Cary suggests, then this could go to the high end. If we get another recession or chip glut in 2005, then we will be lucky to see $40. It seems we should start looking at "selling plans" or "profit taking plans" for those of us that like to sell some or all as we go into the high part of the cycle.
I've made a good deal of money on this cycle already.
Here is what I've done in my newsletter for the last 3 yrs with LRCX:
Bought 400 Shares @ $22.5625 on 9/27/00 (-$ 9,040)
Bought 300 Shares @ $15.875 on 10/17/00 (-$ 4,778)
Sold 300 shares @ $26.000 on 01/30/01 (+$ 7,800)
Sold 200 shares @ $24.250 on 03/21/01 (+$ 4,835)
Sold 200 shares @ $30.250 on 05/15/01 (+$ 6,035)
Sold 100 shares @ $26.000 on 01/03/02 (+$ 2,585)
Bought 150 Shares @ $20.000 on 06/11/02 (-$ 3,015)
Bought 200 Shares @ $15.000 on 07/23/02 (-$ 3,015)
Bought 300 Shares @ $10.760 on 09/10/02 (-$ 3,242)
Bought 300 Shares @ $ 8.920 on 10/15/02 (-$ 2,691)
Sold 200 shares @ $13.090 on 11/01/02 (+$ 2,603)
Sold 300 shares @ $15.000 on 11/21/02 (+$ 4,485)
Bought 200 Shares @ $11.900 on 12/10/02 (-$ 2,365)
Sold 200 shares @ $14.340 on 04/24/03 (+$ 2,853)
Sold Dec'03 $17.50 CC @ $2.40 on 05/28/03 (+$ 225)
Sold 100 shares @ $17.000 on 05/29/03 (+$ 1,685)
Sold 200 shares @ $25.000 on 08/21/03 (+$ 4,985)
I have many more shares bought earlier at low prices so it is still my largest holding. I am curious what others are planning to do for a sell plan for what looks to me our next run.
As you can see, my buying and sellling is much like the AIM folks so if the stock takes a big drop, I often buy back recently sold shares.
Right now I think LRCX still has great value so it remains my largest newsletter stock holding.
I appreciate any comments.
Thanks
Kirk out |
