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

To: Steve 667 who wrote (11329)	5/22/2000 10:57:00 AM
From: Greg h2o	Respond to of 60323

<<All the while, the annual earnings per share has gone from 30 cents in 1996 to 43 cents in 1999. What's wrong with this picture?>> well, the fact it's gone up 4 fold (from 10 to 52, in that time period), while earnings have increased less than 50%. investor sentiment is a fickle thing, isn't it?

To: Steve 667 who wrote (11329)	5/22/2000 5:36:00 PM
From: Art Bechhoefer	Respond to of 60323

Steve, you mentioned, "All the while, the annual earnings per share has gone from 30 cents in 1996 to 43 cents in 1999. What's wrong with this picture?" In fast growing companies, earnings tend to be all over the place because of unforseen costs, or even unforseen profits (e.g., sale of shares in semiconductor plant). While earnings growth is important, often a better measure of where the company is going is in revenue growth from product sales and royalties. This measurement says more about the growth of the business. If the business is well managed and has proprietary technology, profits will follow and/or profit margins will improve. I think that at this point, the revenue growth, combined with intrinsic book value, which I define as shareholder equity plus the estimated value of intangibles, such as patents, tell more about the company than the earnings. What the earnings do reveal, however, is a cash position that may be sufficient to avoid diluting earnings by issuing more shares. Looking at these factors, one can be more confident in the future for SNDK shares. The fact that lots of investors apparently are overlooking these factors simply gives others a buying opportunity. Art