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Technology Stocks : Semi Equipment Analysis

SOXX 297.50

-2.6%

Nov 6 4:00 PM EST

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To: Jacob Snyder who wrote (49851)	11/18/2010 12:39:47 AM
From: Jacob Snyder	1 Recommendation Read Replies (1) of 95383

AMAT now at cycle peak fundamentals: For 4FQ10, compared to previous peak: 42% gross margin; 45% in 1FQ08 2.89B$ sales; 2.56B$ in 3FQ07 $0.35 EPS GAAP; $0.37 in 3FQ07 $9.56B$ sales in FY2010; 9.73B$ in FY2007; 9.56B$ in FY2000 $0.70 EPS GAAP FY2010; $1.20 in 2007 and 2000 investors.appliedmaterials.com valuation: 2.645B$ cash + eq. 2$ cash/share = 2.645B$/1.340B shares $12.38 = stock price now 1.7 = P/S = (12.38 X 1.340)/9.56 18 = PE = 12.38/0.70 $14.69, the January 2010 high, looks like it was the cycle high stock price. Assuming no recession or exogenous shock to the markets, the valuation is low enough now, I don't see any plunge in the stock price in 2011. But I also don't see any sustainable uptrend, either. My guess for AMAT's 2011 stock price range is $9-16. If anyone else wants to risk a guess for the 2011 price range, I'll collect them and repost on 12/31/2011. disclosure: I've been long AMAT since September 2008, at various prices from $17 on down. Sold some recently at $12, will sell heavily at $14, and be out at $16. Moving my portfolio out of semis and semi-equips, into energy and pharm.

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