WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 175.99

-2.1%

3:59 PM EST

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To: limtex who wrote (26857)	10/19/2004 10:58:45 AM
From: Art Bechhoefer	Read Replies (1) of 60323

Limtex, regarding the impact of the global economy on consumer stocks like SanDisk, you correctly interpreted my concerns. The overall economic situation, brought about in part by unsustainably high federal deficits at a time when overall domestic job growth is very slow, and when discretionary income is eaten up by higher state and local taxes, doesn't look very appealing. If the present situation continues, the ability of companies like SanDisk to grow their earnings will be impaired. I do not believe the Bear Stearns scenario for 2 percent growth in 2005 is realistic for SNDK, inasmuch as competition from Samsung and others creates more royalty payments for SNDK. But if the economic situation leads to earnings growth only half of that predicted for 2004, then the price-earnings ratio for SNDK will be affected, and the price will have a difficult time recovering even to $30. Still, I'm willing to risk holding the shares for what could amount to almost a 50 percent increase from the present level. Art

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