Question Re:
"KLIC $15 - $45 Buy at 20, 18, 15
AMAT $12 - $25 Buy at 16, 14, 12
LRCX $18 - $54 Buy at 24, 21, 18
SVGI $15 - $32 Buy at 20, 18, 15
ASYT $ 8 - $20 Buy at 12, 10, 8."
What do the first two numbers for each stock mean? As a clarification, are you projecting that AMAT, for instance, will trade within the range of $12 to $25 during 1998, and not trade outside of the range by a significant amount?
Comment Re: "I looked at P/Book and P/Sales ranges for 1996 for a subset of the key companies - the most recent pessimistic year for Semi Equipment companies. From those ranges, I extrapolated a price range for 1998 assuming that its outlook is equally pessimistic."
My first thought is that the method is probably as good as any, given these times of high uncertainty. However, the uncertainty for 1998 is probably greater than it was in 1996. I've heard 1998 projections that range from 1) a moderate reduction in corporate profits all the way to 2) global depression. Should the first scenario occur, appropriate buy points could be much higher than the 1996 lows. For that matter, the appropriate buy points could even be higher than current levels. Should the second scenario occur, the appropriate buy points could be much, much lower than the 1996 lows.
Best wishes,
I2 |
