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Technology Stocks : Applied Magnetics Corp

APM 1.320

-1.5%

Dec 9 3:59 PM EST

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To: William T. Katz who wrote (10882)	12/9/1997 3:16:00 AM
From: Don Earl	Read Replies (2) of 12298

Hi Bill, You're comming up with about the same numbers I am. I figured .32 primary and about .35 one time charges after tax. I assume similar margins to Q4 for the first two months and am guessing they would pretty much shut down anything that isn't producing and concentrate on MR for the remainder of the quarter. Whatever increase in R&D will probably be off set by exchange advantages on Korean operations. Not good but not the end of the world. I think this possibility has been mostly figured into the current price. I doubt the downside is much more than a couple bucks before it starts to recover. Even if FY 98 earning only came to 1.25 and figuring a PE around 15 to be low, it's still worth $19 per share and is under valued at current levels. They will have their second MR fab up and running in another quarter and most of the yield and inventory problems should be cured by then. If this isn't the bottom, it must be pretty close to it. Regards, Don

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