WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 241.92

+8.5%

3:59 PM EST

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To: Dave who wrote (26005)	5/28/2004 4:11:09 PM
From: Charlie Smith	Read Replies (1) of 60323

Dave, We were speculating on the thread a few months back about the proper "normalized" ROE for SNDK. I maintain that a sustainable (5-to 7-year trend) number of 14% is about as well as they can hope to do. Intel did 4 or 5 points better than this during the 1990s. Difference is proprietary CPU vs. "commodity" flash. I argue that distribution and super smart management is worth a helluva lot to SNDK. Question is: How many ROE points? Skeptics say Micron is a better analog (bad pun) than INTC, and their trend ROE never got much above 10%. As for ROE, current (04, 05) numbers are skewed slightly low by the recent equity offering. Also, I have to agree with whoever said that Hynix, MU et al may have a harder time reaching volume production than expected.

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