Applied Materials No-Politics Thread (AMAT) Message Board

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

AMAT 261.90

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Dec 26 9:30 AM EST

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To: matt dillabough who wrote (11148)	8/9/2004 10:58:26 AM
From: Cary Salsberg	of 25522

I listened to the MXIM conference call, Friday and read the Merrill Lynch (ML) research report, this morning. CEO Gifford was asked why he spent a big chunk of money buying back stock at about $50 and he answered that they felt if they didn't buy now they would need to spend $100, later. In a plea to maintain the MXIM option system, Gifford noted that MXIM stock had grown at a 32% compound rate since IPO. This contrasts with the ML report which states that MXIM is a cyclical company in a cyclical industry and the cyclical peak is here. Also, ML thinks that 21 times CY05 is fully valued. ML praises MXIM for providing booking and backlog data. LLTC doesn't look at bookings because they keep lead ties at 5-6 weeks and believe quick response both is a competitive advantage and negates the importance of bookings. MXIM has stated that they look at product consumption and that bookings reflect customers' short term response to their own inventory situation and the lead times they expect. MXIM has said that bookings have run ahead of consumption (and revenues) and they expect bookings to come back to the consumption number. MXIM expects consumption to increase 9% next quarter. ML has emphasized MXIM bookings, expects bookings to fall next quarter, and uses bookings to support their cycle peak contention. As CEO Gifford said and was pointed out in the previous post, the market is disconnected from the business. Unfortunately, I detect some disingenuousness in the ML analyst's attempt to make MXIM and LLTC fit into the ML forecast for the industry. Once again, a time to buy looks like a time to sell and most seem to have been selling.

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