Kevin:<<pe on this yr eps 75 oct-99 (price of 45/eps of 0.60 *)
pe on next year's 27.8 (oct-2000) 45/eps 1.63
*this year eps from today's goldman announcement: 0.60 for 1999
next year eps from Zacks
****assuming it's rational to write the next year off AND that the y2k
expectations are solid, amat's pe is still high.
using 5 year average 20.6 *'s 1.63 = a price of ~34>>
Kevin, Theodore O'Neill of Needham has raised outlook for AMAT to .84 from .59 for 1999 and to $2.71 from $1.82 for 2000.
So, taking your PE discussion and using Needham instead of Goldman you get the following:
1. 1999 PE 56 at present price of 45
2. 2000 PE 17 at present price of 45
3. Using Zacks 5 year average of 20.6 you get a stock price using Needhams $2.71 of 56.............
I don't know, but it seems to me that there appears to be much more upside potential for AMAT than downside. I know, easy for me to say since I am long on it. Good luck on the short side. Jeff
<<
U.S. Chip-Equipment November Book-to-Bill Ratio Rises
Mountain View, California, Dec. 18 (Bloomberg) -- The U.S. semiconductor equipment book-to-bill ratio, which measures demand for U.S.-made tools used to make computer chips, rose to 0.84 in November as orders climbed for a second month.
A ratio of 0.84 means that for every $100 of shipments, U.S. chip-equipment makers took in $84 in new orders. A ratio higher than 1.00 indicates a growing market. Semiconductor Equipment and Materials International of Mountain View, California, which reports the ratio, revised its October figure to 0.75 from 0.73.
Orders for new equipment are ticking up after declining for 10 months to their lowest since March 1993 in September, as chipmakers scaled back plans to build new plants amid falling prices and oversupply. While orders were still 51 percent less than last November's $1.63 billion, the higher book-to-bill means that Applied Materials Inc., Novellus Systems Inc. and Applied Science & Technology Inc. may be poised for increased sales.
''The business has stabilized for all products, but it's going up for a select group of companies that have leading-edge technology,'' said Needham & Co. analyst Theodore O'Neill. ''This benefits Applied (Materials), Novellus and their suppliers more than anyone else.''
Applied Materials shares rose 4 3/16 to 45 5/16 in midafternoon trading of 11.3 million, making it the sixth-most active stock in U.S. markets. Novellus rose 4 3/8 to 53 5/8. Applied Science shares rose 1 to 9 1/8.
O'Neill boosted his earnings estimates for Applied Materials, which he said is benefiting most from the recovery in orders. He raised his estimate for the Santa Clara, California- based company's earnings to 84 cents a share from 59 cents in 1999 and to $2.71 a share from $1.82 in 2000.
Orders Improve
November orders rose 29 percent to $805 million from $623.5 million in October, and 67 percent from $481.3 million in September, when the book-to-bill was 0.57.
Semiconductor Equipment and Materials analyst Dick Greene said orders for equipment on the so-called front end of the chipmaking process were the ''major spark'' behind the rise in total orders. Front-end tools are used to prepare chips, deposit thin layers of wiring and insulation to build circuits and inspect for defects. Back-end machines test and package chips.
Applied Materials, Novellus and KLA-Tencor are the largest makers of front-end chip equipment. The largest company to make tools for the back end is Teradyne Inc. All are included in the Philadelphia Semiconductor Index.
The shares of KLA-Tencor rose 2 1/16 to 43 3/8, while Teradyne gained 3 1/8 to 41 1/8.
Shipments rose to $962.9 million from $834.4 million in October and $845.7 million in September.
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