Sparky65,>According to my information AMAT is trading at a PE of 19. KLAC is trading at a PE of 40 and it looks like NVLS doesn't even have a PE. I realize that the market is in a downturn. But, semi's are not going to go away. And, isn't AMAT considered the industry leader?<
Yes, as Gottfried has posted previous (go to Gottfried's profile) Amat is one of the Gorilla's of the Silicon Valley.
>Is there a reason why AMAT is trading so low compared to its peers?<
Yes, IMO, AMAT is extremely larger than the other semi-equip companies, therefore, the percentage increases over the previous years are harder to come by. Also, IMO, AMAT probably spends a greater amount in R & D than NOVL, etc. In the long run it will be to their benefit in their gaining of market share. Check their increase cash flow and reduction of debt in the 4/24/98 Value Line release. They have a strong cash position. Will they acquire an additional company?
>With a PE of 19 for a company that is considered the leader, is there something going on with this company that is not well known?<
No, IMO, AMAT is still holding above the DW support line which is at $35. When, it breaks the $39 level, a triple top, it will continue moving upward.
However, I would not be surprised if the semi's and AMAT drops lower along with the overall market in the near future. But, AMAT and the Semi's, IMO, will hold up better since the sector is lower already and will be one of the first sectors to rebound.
With Greenspan, Rubin and Clinton getting togather, today, do we honestly believe that they did not talk about an increase in interest rates.<G> Didn't Clinton state on TV that he thought that an increase would only be necessary to keep the economy moving forward? However, politicans, IMO, will not want to ruin their chances to win elections--it just is not in their own self interest. They will do everything to have a booming economy if at all possible. But, before the boom, IMO, we will have a correction.
Check out the historical data for the third and forth years of a president cycle. If history holds true, the market, semi-equip, and AMAT should do great. IMO, the closer that we get to '99 the better off that we should do.
With a average High pe of 26.1 for the last five years ranging from Value Line of 13.3 in 1996 to a high of $39 in 1997 times an estimated
Value line EPS of 3.35 we have $87.435 by the years 2001 and 2003. However, if I recall correctly from Gottfried's post AMAT actually hit a PE of 50 during AMAT's last upward cycle.
S & P, as I have been informed by one of my local investor colleagues, has posted $5.52 EPS for the the year 2001-2003. This would give us a price of $144.1 (26.1 average pe X 5.52) Can someone else verify this?
The only reason, IMO, that I can see for the difference is that Value Line was figuring a 2 X 1 split in their calculations while S & P did not.
We can see that AMAT is a solid stock which is very volatle with great potential.
Maybe, Big Bucks, Teri, Tito, Gottfried, and Kumar can help us out.
Isn't Klac a front end Semi-equipment maker to be followed by AMAT and NOVL?
We will know how the Dorsey Wright BPnyse, otc, option bp, 10week moving average and sectors are doing later today, Wednesday.
Just my opinions.
Paul V.
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