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Technology Stocks : WDC, NAND, NVM, enterprise storage systems, etc.

SNDK 221.59

-2.4%

1:18 PM EST

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Sam

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To: Sam who wrote (3506)	2/12/2018 8:58:58 AM
From: Charlie Smith	3 Recommendations of 4828

Applied Materials: Macro pullback creates savory valuations even as Pos memory data points flourish; Buy - B. Riley FBR (48.08) B. Riley FBR notes AMAT reports F1Q18 results 2/14 AMC with a CC at 4:30 PM ET. They project moderate print and guide upside versus the Street for continued strong quarterly execution. Fundamentally, they believe CEO Dickerson's industry spending view can reflect LDD CY18 growth and a further rise in CY19. Indeed, his 2H17 call for AI-led silicon consumption growth appears prescient in light of INTC's (Buy; $55.00 PT) big 1/25 beat and NVDA's (Buy; $290.00 PT) huge 2/8 upside. In between, all Memory makers overachieved. iPhone and China smartphone demand weakness are YTD concerns, but the former was no worse than feared and data points on the latter began improving last week (i.e. ON and SWKS). Their analysis suggests DRAM has become incrementally tighter, not looser, in 1Q18. They suspect a NAND bottom and pricing turn in 2Q, so a key fundamental tailwind may be near. CY18's P/E is just 11.5x, a 34% market discount but with an upside bias to FY18-20 EPS of $4.11, $4.65, and $5.18 plus cash return optionality they see compelling risk/reward. They can't rule out another market leg down, but see savory entry points for GARP investors.

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