Applied Materials No-Politics Thread (AMAT) Message Board

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

AMAT 223.95

+1.7%

Nov 21 9:30 AM EST

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To: Big Bucks who wrote (10158)	6/5/2004 10:03:38 PM
From: Big Bucks	Read Replies (1) of 25522

If I were a fund or institutional investor these are the things I would consider about AMAT and other semi-equip manufacturers: 1. Fabs are buying on an as needed and controlled basis, not massive purchases. 2. Industry growth is on a steady but moderated ramp and has been for 1year. 3. There are 1.69B AMAT shares outstanding. ( a big negative, IMO) 4. With moderating industry growth, I wouldn’t want to tie up investment money that might better be used in faster, more dynamic growth areas. 5. I would desire to reduce my exposure and risk to an industry (semi-equips) in a technical downtrend by selling into any rallies. 6. Knowing that the semi industry is cyclic, depending on the demand vs capacity ratio, and seeing chip manufacturing capacity ramping, the demand capacity ratio is rapidly moving toward unity and eventual overcapacity. 7. Fabs are trying to maximize profitability without overextending their investment in equipment while maintaining maximum productivity (and profitability) 8. Semi-equips with less outstanding shares represent a better value from a PE and price/sales ratio and offer a better investment return option on a q-q basis without having to hold a huge number of shares in a portfolio. 9. AMAT does not pay a dividend and is unlikely to have a stock split ever again. 10. Interest rates are going up, which historically has a negative impact on fab/equipment investment. --------- FWIW, I’m 100% cash for a while leading up to June’s Fed meeting and options expiration….. If we get a ½% rate hike with oil prices dropping then I’ll reconsider my investment options at that time. My preference is NVLS and LRCX in the semi-equips…… BB

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