kid,
For once I agree with you, somewhat. The wealth effect created by a rapidly rising stock market with little attention given to company fundamentals is a dangerous thing for all who are invested. That being said, I find it hard to accept any notion that over a time frame of 1-2 years AMAT is overvalued. Yes, it is ahead of where it has historically traded during past downturns, but it is nowhere near its highs, as are most other companies, especially those with the largest capitalization. Given that AMAT should see phenomenol rev growth over the coming years, how can one say that a PSR of 2.7 is excessive when we have internet cos. with no earnings prospects for years trading at PSR's of 30+???? In addition, these cos. are operating in a low margin/highly competitive/commodity business where volume is key and is not at all guaranteed.
What does AMAT have on its side? Huge spending on fabs in the coming years. The average fab now costs $2B; in 2010 that will be $10B. Taiwan alone has said they are going to spend $70B over the coming ten years. Add to that Intel's capex this year and multiply it by 10(leaving out any growth which is sure to happen) and you have another $50B. BTW, this recent downturn will compress the necessary spending into a shorter window, creating the possibility of huge runups that may trample the shorts. AMAT also has on its side .18mu and below procceses, copper prosseses, fab automation, DUV, EUV?- all of these cost $$ and are coming, regardless of how many posts you post to the contrary. Short AMAT at your own risk. The time is coming when even Kurlak will switch sides. The most recent BTB was .8; you must guess how much lower will we go? The question is, do you feel lucky.... |
