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Politics : Formerly About Applied Materials
AMAT 261.90+0.4%Dec 26 9:30 AM EST
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To: Joe Albinowski who wrote (1818)9/12/1996 6:30:00 PM
From: Jeff Maresh   of 70976
 
Joe: You are obviously somebody who has the guts to ignore hype from anyone. I've been watching AMAT and just recently bought as the stock moved into my BUY range. I am a value-type fundamentalist and here are my notes on AMAT that elaborate on your comments:

1. Semiconductors truely cyclical. Treat the stock like one.
2. They have $2B in cash assets and another $500M in inventory - nice nest egg.
3. They have practically no debt. (Companies with no debt can't go bankrupt)
4. They are still making a lot of money - just not up to everybody's expectations.
5. Net margin is 15% and ROE 20% - thats great management.
6. While other semi companies are laying off and cutting R&D to cope with debt and survival, AMAT's R&D remains intact. At the start of the next cycle, this will put AMAT out in front. In a prudent move, the layoffs were mostly in support and sales.
7. DRAMs are a small part of the semi industry. Look at all the other products that use chips.
8. Europe is still in a recession but is starting to show signs of recovery - acceleration in purchases of capital equipment and consumer goods.
9. Asia continues to grow at a very rapid pace - continued purchase of cap equip and consumer goods.

These are a few but basically I believe this is a great tech blue chip company.

Jeff
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