Posted this on CYMI tonite, but felt it to be appropos of AMAT also...
<< <<...the question is not what PE of trailing earnings are but what are the
future earnings looking like, and what does the market look like.>>
FWIW (esp. FWIW given that FA and the use of PE as a valuation tool seems
to be irrelevant for this sector these days), I charted my semi-equip watch
list last week. In order to dampen the signal of the sectors crash, I annualized
the past 4 calendar quarters plus the present to create a "running" EPS in
addition to the usuals. CYMI turned out as follows:
Calendar EPS Summaries Current Fiscal Year EPS Summaries
4Q Ago EPS: $0.23 Actual Est
3Q Ago EPS: $0.24 Q1 EPS: $0.09 Mar-98
2Q Ago EPS $0.09 Q2 EPS: $0.06 Jun-98
Last Q EPS: $0.06 Q3 EPS: * $0.05 Sep-98
Present Q EPS* $0.05 Q4 EPS: * $0.03 Dec-98
* (estimated)
"Running" EPS $0.536
YTY EPS Growth Rate -57%
"Running" PE 24.3
Current FY EPS $0.23
YTY EPS Growth Rate 70%
Current FY PE 56.5
Next FY EPS $0.39
Next FY PE 33.3
So, despite a (-) 57% EGR, the "Running PE" sits at 24 while, despite a projected 70% EGR
for next year, the "Forward" PE is 33. Quite frankly, I'm at my wits end with this rally
(even tho' I've profited modestly from trading) and don't know whether to admit defeat
("I blew it; missed the bottom and now face a much worse risk-return ratio") or look
Mr. Market in the eye and tell him he is wrong. Everybody know the folly of the latter...
Did the same for AMAT, after assuming a ($0.35) loss Q4, post adjustment:
Calendar EPS Summaries Current Fiscal Year EPS Summaries
4Q Ago EPS: $0.47 Actual Est
3Q Ago EPS: $0.60 Q1 EPS: $0.60 Jan-98
2Q Ago EPS $0.37 Q2 EPS: $0.37 Apr-98
Last Q EPS: $0.13 Q3 EPS: $0.13 Jul-98
Present Q EPS* ($0.35) Q4 EPS: * ($0.35) Oct-98
* (estimated)
"Running" EPS $0.976
YTY EPS Growth Rate -23%
"Running" PE 34.8
Current FY EPS $0.75
YTY EPS Growth Rate -8%
Current FY PE 45.3
Next FY EPS $0.69
Next FY PE 49.3
SFAM and KLAC have a similar pattern, except that KLAC has 260% EGR for next FY. My
read on that is that their EPS haven't been "managed down" yet, and it remains to be
seen whether they can do it as brilliantly as AMAT has to date.
Anybody have any brilliant ideas? Still sitting crosseyed, still short on a
couple of 'em, wishing it were all black and white....>>
Respectfully submitted,
BP
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