This discussion of P/E suffers from having only a one year horizon forward or back. If one looks out two or three years, anticipates that AMAT has the potential to earn $2 - $3/ share at that time, assigns them an historically conservative trailing P/E of 25 at that point, and then extrapolates back to a fair price today to give one a good return of, say, 20% on today's investment, anything under $30 looks like a good buy - even better, if you use LEAPS. IMO, this is why AMAT maintains strong support in the 20's, because institutional investors understand this. The price will get into the teens if there is widespread panic on the part of individual investors, and this would happen if the US slips into recession, but short of that, I think those who are waiting to get in at less than $22 will be disappointed. So if you think there's going to be a recession, sell everything and wait for the bargains. Otherwise, buy AMAT now, while it's on sale. For these sales, they don't publish on which date the sale will end! All in my very humble and as-likely-as-not-to-be-wrong opinion.
Bob |
