Applied Materials No-Politics Thread (AMAT) Message Board

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

AMAT 256.41

+1.1%

Dec 19 9:30 AM EST

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To: Cary Salsberg who wrote (9842)	5/19/2004 8:02:57 PM
From: Sam Citron	Read Replies (1) of 25522

Merrill forecasts $1.25 EPS for CY05. My [extrapolation]model calls for $2.50 EPS in CY07. How did you determine that EPS would double between CY05 and CY07? That would indeed be a nice 5 year string of uninterrupted growth. From 1991 to 1996, AMAT grew EPS consistently at .02, .03, .08, .16, .32, .42, so it would not be all that unusual. I don't think the 10 analysts will move to buy. But your model assumes continuing robust growth in CY06 and 07, while theirs seems to assume a decline starting in 1Q06. Wouldn't they be forced to move to a buy as they saw that the edge was not nigh after all? Your mention of housing and HDD as possible comparisons for AMAT provided an almost ROFL! I was not really comparing AMAT to a housing or HDD stock. I was merely thinking of how investors respond when an industry has been cyclical for a very long time and then begins to show signs of stable growth. In the case of housing stocks, for example, it does not seem to have helped their PEs, although the rise in EPS has been so dramatic that it has caused a rapid rise in the stocks nonetheless. Sam

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