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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: w0z who wrote (36259)	8/4/2000 2:08:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

There is no way IMHO any investor could justify buying KO over AMAT at these levels. We are seeing this discrepancy primarily because the large fund holders have proven themselves to be the weak hands, and have been shaken out over the course of the summer months. When they realize the cycle is far from over, after perhaps reading a few more releases like VSEA's today, we will see appreciation in price, perhaps raidply so since we are trading at such a discount to the market and AMAT's own growth rate. BK

To: w0z who wrote (36259)	8/4/2000 2:08:58 PM
From: Gottfried	Read Replies (1) \| Respond to of 70976

Bill, re >Do you think we will be consuming 20X the amount of Coke per capita in 7 years? < No way! Not after consuming 1 billion transistors. We're full up. :) Gottfried

To: w0z who wrote (36259)	8/4/2000 2:30:19 PM
From: w0z	Respond to of 70976

For the sake of accuracy, a 20 times increase in transistors per capita over 7 years works out to around 18% growth per year for chips assuming a 30% shrink rate per chip per year (Moore's Law) from today's average density...this sounds about right. 1 Billion transistors per capita in 7 years discounted by 30% per year would be equivalent to ~160 Million transistors per capita today. For 50 Million to grow to 160 Million (equivalent) in 7 years works out to ~18% per year.

To: w0z who wrote (36259)	8/4/2000 2:41:21 PM
From: FR1	Read Replies (2) \| Respond to of 70976

I have a simple analysis question that I hope somebody can help me with. I frequently hear things like the following: On August 2, 2000 SSB (Solomon Smith Barney) said the following: As a result, we are lowering our price targets as follows: AMAT to $95 from $140 (25x our CY01 EPS estimate of $3.83) My question is, where do they get the 25x figure. The first thing I do is go to Microsoft Investor and get a chart of historical earnings for AMAT. Then I add a column, called % Gain, to show me the Y-Y % growth. I also add a column, called X, to see the multiplying factor that gets us from Y-Y. AMAT Revenue - Quarterly Results ($ Millions) FY (10/00) X % Gain FY (10/99) X % Gain FY (10/98) 1st Qtr 1,667.00 2.25 55% 742.5 0.57 -43% 1,307.70 2nd Qtr 2,190.00 1.96 49% 1,117.60 0.95 -5% 1,176.30 3rd Qtr NA 1,433.50 1.62 62% 884.5 4th Qtr NA 1,565.50 2.33 133% 673.2 Total 3,857.00 4,859.10 1.20 20% 4,041.70 Earnings Per Share - Quarterly Results FY (10/00) X % Gain FY (10/99) X % Gain FY (10/98) 1st Qtr $0.40 5.71 83% $0.07 0.23 -77% $0.30 2nd Qtr $0.54 3.00 67% $0.18 0.95 -5% $0.19 3rd Qtr NA $0.31 4.43 343% $0.07 4th Qtr NA $0.40 -1.60 -260% ($0.25) Total $0.94 0.98 $0.96 3.10 210% $0.31 If you look at AMAT’s current year earnings, they would be $1.88 for the year if they just remained the same and did not grow. So it is reasonable to assume a $3.83 annual earnings for AMAT for next year. I am now trying to see how they came up with the factor of 25 to multiply the annual earnings by. I need some help. How do they come up with that number? Any help will be appreciated. Franz