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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (100782)	3/29/2000 5:07:00 PM
From: niceguy767	Read Replies (2) \| Respond to of 1571641

John Fowler: Re: "niceguy, re: AMD stock price Did you ever think that a great earnings quarter may be priced into the stock? AMD had a nice run up, but now appears to be trading with the rest of the techs. What you believe about a great AMD quarter is not a secret, the street may even be more informed than you are! A lot of folks on this thread are claiming to spend a lot of money on calls, on a stock that doesn't appear to be going anywhere fast. Hope you are right, but I would be cautious." Comment: I appreciate your comments John...but based on my analysis, AMD the world's leader in microprocessors and flash memory, its 2 largest divisions, will earn between $4.00 and $7.00 in Y2000. Q1 earnings will, imho, show that $7.00 is not improbable! AMD at $50 to $55 certainly does not have $4.00 factored in let alone $7.00, but it will, very shortly after Q1 earnings release of over $1.1 billion in revenues and over $1.00 eps! If I'm correct at say Y2000 eps of $5.50 (and 13 million Athys combined with stable flash memory will easily do that), is a multiple of 10 at all reasonable for a growth stock like AMD which is what it is at its current price?...I'd say a multiple of 50 would be conservative which implies a price of $275...No, AMD's current and future growth is not even nearly factored into a price of $50 to $55, but I think Q1 earnings will do much to address the anomaly between current AMD price and the present discounted value of future probable earnings!...i.e minimum $70 by April 20 (and maybe much higher)!

To: Road Walker who wrote (100782)	3/29/2000 5:19:00 PM
From: that_crazy_doug	Read Replies (1) \| Respond to of 1571641

<< Did you ever think that a great earnings quarter may be priced into the stock? AMD had a nice run up, but now appears to be trading with the rest of the techs. What you believe about a great AMD quarter is not a secret, the street may even be more informed than you are! >> Say there was a company X who was in a high tech area. They post record earnings in the seasonally strongest quarter of the year. They then post 20% sequential earnings growth in the next quarter which is the seasonally weakest of the year. The forward multiple of the company becomes 25 if you assume no more growth for the rest of the year, and it becomes around 13 if you assume the same 20% growth the rest of the year. That would be the scenario if AMD puts in earnings of 51 cents a share. Now, do you think if AMD could post that much per share that they company would continue to trade at a multiple that low. Considering the high sequential growth going from strongest to weakest quarter? I would suspect that the growth would increase even more throughout the rest of the year. Also, .51 is not what people are talking about here, they're talking about .90 (the average from the eps contest). Let's run some numbers with .90 a share. At .90 the forward multiple is about 14 with no more growth, considering an over 100% growth during the transition from strongest to weakest quarter, you'd have to assume they could still probably grow earnings even more from the normally weakest quarter toward the normally stronger quarters. Assume they only average 20% more sequential growth per quarter (since 100% would be hard to keep) and the forward multiple is now about 10. For a high tech company with big earnings growing at an extreme rate, I'd say a multiple of 10 is probably unrealistic considering the industry average forward multiple is probably closer to 50. So to answer your question: No. I don't think blowout quarter is priced into the stock. There are some analysts who obviously have it priced into their targets for the stock, because they have strong buys on the stock. However, I don't think it's even remotely in the current stock price.

To: Road Walker who wrote (100782)	3/30/2000 4:09:00 PM
From: Scumbria	Read Replies (1) \| Respond to of 1571641

John, Did you ever think that a great earnings quarter may be priced into the stock? AMD had a nice run up, but now appears to be trading with the rest of the techs. What you believe about a great AMD quarter is not a secret, the street may even be more informed than you are! A lot of folks on this thread are claiming to spend a lot of money on calls, on a stock that doesn't appear to be going anywhere fast. Hope you are right, but I would be cautious. I guess that your question has been answered. ;^) Scumbria