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

To: orkrious who wrote (10506)	4/20/2000 9:23:00 AM
From: Art Bechhoefer	Read Replies (2) \| Respond to of 60323

Jay, why is this SNDK report different from other reports? Because SNDK earnings are up, their debt is low, and their cash flow is substantial. I agree that a one-time gain can distort predictions for future earnings, but whether they are one-time gains or continuing gains from operations, licensing fees, and royalties, all of these gains flow through to the asset side of the balance sheet, as there are no dividends. Also, while there are constraints on capacity, we know that Taiwan Semiconductor began production at a new plant about half way through the quarter. While we don't know if any of the production was destined for SNDK, it is reasonable to assume that the additional chip capacity from the new plant did help and will help SNDK even more in succeeding quarters to meet the explosive demand. We also know that the new plant being built on a joint venture with Toshiba in Manassas, VA is coming along nicely and will be able to add to production toward the end of the year or early 2001. All this is by way of arguing that these purportedly "one-time" gains are getting to be habitual. You can call them additions to assets, or whatever, but in the end, this company is creating wealth for its shareholders, and creating it faster than most other companies. Whether one choose to evaluate a stock by a PE that excludes one-time gains or by the relationship of stock price to book value, I believe one can safely multiply the present stock price by two without reaching a price that would be considered out of line, even in the current climate of tech stock skepticism. Art