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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Eric Ajimine who wrote (6528)	7/27/1999 12:30:00 AM
From: Craig Freeman	Respond to of 60323

Eric, re: "Can someone explain it to me??" I'll try. Think of SNDK as an "Internet stock: and you get the idea. Digi-cams are on a rocket. MP3 is the big download. SNDK has a market share more like Intel than AOL or eBay. In short, SNDK is "in play". And like all 'Net stocks this one is about adding incrimental revenue to a diversified portfolio and not a paticularly good "core" holding. It could rocket to $12,000 or crash to $12. If you short it, you could get killed. Buy calls and you could go broke. But for those with enough cash to withstand whatever the market has to offer and the patience to wait for years, SNDK has paid off handsomely. If you don't already own it, don't spend more than 5% of what you have to buy it. And if you already have some SNDK, don't keep more than 10% in it. This is simple advice for people who like to bet on red, black, or "double 00". OK, it is a bet. But over time "investors" invariably do better than gamblers. Craig

To: Eric Ajimine who wrote (6528)	7/27/1999 7:59:00 AM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

Eric, while it looks on the surface as if the royalties are carrying the rest of the company, that conclusion assumes that royalties carry no expenses in themselves. It doesn't make much sense to me to attribute research, development, administrative, and other core expenses solely to the manufacture and sale of products. At least SOME of that should correctly be attributed to royalties. As for the P/E, that's not the only measurement worth looking at in a fast growing company whose products are just beginning to reach various markets. Look at revenue growth rates, price to sales ratios, and above all, market price to book value, comparing those stats with other fast growing companies. Also look at the amount of cash on hand, comparing it with other companies, and you'll see why other companies, when they get strapped for cash, frequently issue new shares. SNDK doesn't have to, and that is one mark for sound management. Taking all these factors into consideration, the stock to me doesn't seem overpriced at all.

To: Eric Ajimine who wrote (6528)	7/27/1999 8:45:00 AM
From: Sam	Read Replies (1) \| Respond to of 60323

Eric, To be a little more specific, perhaps, look at the rate of growth of revenues: from about $23m to $42m. Holders or buyers of Sandisk believe that rate will be maintained exceeded over the next couple of years as their markets come into play. Flash memory is just becoming a category that investors recognize now, and will be ubiquitous in portable electronics from MP3 players to cell phones to digital cameras to electronic books to .... let your imagination fly. Flash could even be in cars, storing maps for global positioning devices. Sandisk has, as you can tell from their royalty income, valuable intellectual property which allow them to collect a nickel when most other companies manufacture flash, as well as their own manufacturing facilities. This is why they are the premier play on flash today.