Rich,
Re:. What is the likelihood of Applied Materials NOT achieving a $70 stock price in five years?
I am by no means a guru, just a guy with an inordinate amount of his portfolio in this premier tech name. IMO, the odds of AMAT not hitting $70 in 5 years is near zero. But then, if you rephrased the question to ask what are the chances AMAT will not hit $70 in 2 years, I would also say close to zero. Anytime the SOX lags the overall market, there has been a period of substantial outperformance. IMO, that is what we are setting ourselves up for now. Things do not look too good in the tech arena lately, and history has shown, almost without exception, that this is precisely the time to be accumulating these cos. For AMAT to hit $70 in '99, all they would need is an eps of ~$2.00; this is about what is forecast for FY99 even w/o a turnaround in asia forecasted. Since we are at the start of an up cycle, AMAT will be awarded a higher multiple because strong eps % gains are around the corner and no MM worth his poceket-watch wants to be left standing at the station, waving as the train leaves.
Regards,
Brian |
