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Technology Stocks : WDC/Sandisk Corporation
WDC 200.46+6.8%Jan 9 9:30 AM EST
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To: Ron Wilhoit who wrote (923)10/15/1997 7:58:00 PM
From: Mike Winn   of 60323
 
According to news:
"Total unit shipments increased 34% compared to the second quarter of 1997. This increase was partially offset by a decline in average selling prices of 7%, primarily due to high volume shipments of low capacity, lower margin CompactFlash cards. Product gross margin increased to 33.4%, up from 31.5% in the second quarter due in part to continued product cost reductions. Revenues from licenses and royalties in the current quarter increased by $2.5 million, to $5.9 million, attributable to recent cross-license agreements entered into by SanDisk with Hitachi, Toshiba and Samsung. "

Sandisk's total revenue for this quarter is 36 million, so it's not quite exactly that Sandisk alone has kicked the butt of Intel, but it is perhaps the combination of all the companies such as Hitachi, Toshiba and Samsung who have licenced Sandisk's flash technologies who gave trouble to Intel. Sandisk's flash is not compatible with Intel's flash, but Sandisk had 80% of the market. Profit margin has improved due to product cost reductions. Next quarter will show even a sharper increase in royalty fee as Sandisk will sign up more OEMs. I sure hope that Intel will be one of the OEMs.

Sandisk has shown an 80% yearly growth in earnings, so does this stock deserves a PE close to 80?
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