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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: hueyone who wrote (26650)	6/22/2000 12:04:00 PM
From: MarkR37	Read Replies (1) \| Respond to of 54805

Thanks for the flash updates. Have any of you ever discussed Redback Networks(RBAK)? I was wondering what all of you think of this company.

To: hueyone who wrote (26650)	6/22/2000 12:14:00 PM
From: gdichaz	Respond to of 54805

hueyone: Thanks for the comparative data on SNDK and SSTI. Must admit that since I am much more heavily in wireless, (the Q) and fiber (JDSU and SDLI), I pay less attention than I should to my SNDK and SSTI holdings. Very useful update and viewpoint. Since you stimulated me to look again at this area of flash, seems to me that SNDK is more concentrated on removable storage for handhelds, and SSTI is more concentrated (and increasingly so) on embedded flash - especially with its Intel relationship, so while there is overlap, there are major differences in potential uses. Would appreciate your comment. Best. Cha2

To: hueyone who wrote (26650)	6/22/2000 12:53:00 PM
From: StockHawk	Read Replies (2) \| Respond to of 54805

>>analysts are looking at calendar year EPS growth projections of 104% for SSTI versus 44% for SNDK...It is entirely possible, however, that the projections for SNDK are understated << If analysts are understating earnings projections that would be good for investors, as it would mean that SNDK would be able to surprise to the upside. I checked two sites and both show consensus eps estimates of 22 cents for the next quarter and 87 cents for the year. This is one of those sites: ultra.zacks.com One infrequent poster on SI, Cardin Drake, has projected the eps to come in at 29.5 cents. Why should we care what he thinks? Well, on Jan 27 he posted his projections for the previous quarter with amazing accuracy. Here is that post Message 12703974 Later, on April 20, he compared his January projection against the actual numbers. Take a look: From: Cardin Drake Thursday, Apr 20, 2000 11:33 AM ET Reply # 10535 of 11984 Doing the math for Q2: Well, just to establish credibility and brag a little, from my 1/27 (post #8938), my estimate vs. actual: 1/27 est. Actual Product 98 97.2 License 12 12.1 Total revenue 110 109 .3 GP 41 41.6 Op. Income 18 17.55 EPS .215 .21 Now the fun part, Doing the math for Q2 The quarter is booked and prices are firm. We can expect Megabyte growth of at least 35%.(Let's hope for 40% again) That translates to product revenue of around 131. To be conservative, we will only raise margins 1% to 31%. (probably will be 32-33%, last quarter went from 27 to 30). Gross profits =40.6 + 12(License&Royalty) = 52.6 guestimate on operating expenses-increase to 25M Op. Income -- 27.6 M Interest Income 5.6 M (expect an increase, but we'll leave it flat) Income before taxes 33.2 Provision for taxes 11.62 After tax income 21.58 ***EPS = .295 The good news is that operating expenses are now covered so additional gross profits from Product Sales growth will all fall to the bottom line. Margins could hit 40% by Q3-Q4 if prices remain stable. Translation: Blow-out earnings are coming in Q3. The link for the above post is: Message 12703974 Later that same day Cardin posted his thoughts for the full year: To: Bhag Karamchandani who started this subject From: Cardin Drake Thursday, Apr 20, 2000 3:16 PM ET Reply # 10550 of 12170 Ausdauer, calendar 2000 Earnings projections: Thanks for the kind words. The key to the 2nd half of the year is the growth in megabytes from quarter to quarter. The growth has been and will remain constant at about 40% per quarter. The good news is because the base is getting so much larger, the effect on the bottom line is magnified, particularly now that operating expenses are covered. At a conservative growth rate of 35%, we are looking at Product revenues in Q3 of 177M and 239M in Q4. With a conservative gross margin projection of 32%, Product revenues will contribute 56.6M and 76.4M in gross profit Q3 & Q4, respectively. Assuming 12M in license revenue and 5.6M in Interest per quarter, if you crank the numbers, you come up with EPS for Q3 of .42 and Q4 of .57 That gives you $1.49 for calendar 2000. Look for a wave of analysts revising their numbers upward. I feel these are the absolute low-end numbers for Q3 & Q4. If you plug in a more likely 40% growth rate, and margins in the 35-40% range, it will make a big difference. WHAT CAN SCREW THIS UP? Not counting China invading Taiwan, only one thing. In the first half of the year, we have seen price per megabyte remain flat. It appears very likely that it will remain relatively flat for the rest of the year. But if that changes and it begins to fall, it would change these numbers dramatically. Message 13472852 ---------------------------------------- Per Yahoo the next earnings date for SNDK is July 17. Lets see if Cardin can go 2 for 2. StockHawk

To: hueyone who wrote (26650)	6/22/2000 2:43:00 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

with SSTI breaking out to new highs at 114, it is still selling at 32 times calendar year 2001 earnings versus SNDK (at 74) selling at 59 times calendar year 2001 earnings. In addition, analysts are looking at calendar year EPS growth projections of 104% for SSTI versus 44% for SNDK. So with regard to near term projected earnings and near term projected growth rates, it can be argued that SSTI is a better buy. Very often that sort of premium is given to a SanDisk because the market thinks that the company has better long-term prospects. Such a situation is important to note for the simple reason that the market rarely thinks long-term. --Mike Buckley