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Strategies & Market Trends : The Art of Investing

PICK 45.35

+0.2%

Nov 7 4:00 PM EST

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To: Gottfried who wrote (420)	2/18/1999 3:57:00 PM
From: Sun Tzu	Read Replies (2) of 10550

I agree with you that the stock is ahead of itself. Even though my estimates are (considerably?) higher than most people's, I am not a buyer at these prices; there is simply not enough risk premium for me. To judge where AMAT should go, you have only history to guide you. Fortunately AMAT has been around long enough that you can find a precedence for any situation. On average AMAT trades between 2x ~ 3.3x revenue and 20x ~ 30x earnings. I prefer to go by the revenue numbers as they are more predictable (for me). When coming out of down turn a cyclical trades at the high end of its multiple to estimates. That means unless the estimates are raised, $90 is the absolute most you should expect and those who are seeing 100 are having wet dreams. Thanks for the link. I'd seen that from one of your posts on AMAT thread. Sadly it is missing the next 3 data points <VBG>. Sun Tzu P.S. I expect at least a 25% risk premium before I take on the stock. PPS. Feel free to cross post this on the AMAT thread.

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