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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: peter_luc who wrote (13896)	10/14/2000 11:28:49 AM
From: niceguy767	Read Replies (1) \| Respond to of 275872

peter: "PS: Do you believe that there is the danger that one of the big boys might think about a take-over now. It would be a damned good opportunity for them. Hmmm, not a pleasant thought." Comment: I honestly can't see why someone wouldn't attempt to "take out" AMD while it is at this price level...Don't think you'll find too many acquisition targets exhibiting the strong features that follow (based upon estimated Y2000 rev's of $5 billion and eps of $2.50): 1. $1 billion Y2000 after tax profit (includes Comm Div'n sale)on $5 billion in Y2000 revenues. 2. Y2001 revenues of $7 billion (est'd) almost equal current market cap. 3. State-of-the-art Dresden fab with additional available capacity to come on stream at a time when competitors are clamouring for additional capacity. 4. World leading product lineup in its 2 divisions, flash and microprocessor, two of the fastest growing sectors, not only in the tech sector, but all sectors... 5. Flash production already committed for Y2001. 6. Microprocessor growth expanding rapidly owing to significant price/performance gap over competitors at all MHz speed grades. Tremendous upside potential assuming little or modest penetration of workstation and server spaces in Y2001. 7. Revenue Growth Rate of 70% in Y2000 and projected at 25% to 40% for the foreseeable future while trading with a p/e multiple of 8, in a sector where companies are almost always always awarded a p/e multiple in excess of anticipated growth rate...(i.e a p/e of 25 for any tech company exhibiting the foregoing features could be considered exceedingly conservative...) I've only experienced 1 other tech investment where market (Nasdaq) price and fundamentals seemed so irreconcilable...About 5 years ago, this stock was at $52, market cap was $0.5 billion if I remember correctly, and get this, revenues were $25 million...yes, I repeat, revenues (i.e. not earnings)were $25 million...Despite the fact, it had a great storyline, it was an obvious put candidate, imho, as I'd be hard pressed to pay $2.00, let alone $52, for this one...So what happenned in the following 30 days??? They ran it up to $200 in a classic short squeeze, after which it abruptly returned to the $30's...Today this stock trades around $15... In answer to your question, it would seem that one way or another, a significant revaluation of AMD's price is in the cards...either the market bids up the price or someone attempts to take them out, as imho, price maintenance at $22 is untenable in the intermediate term...As you know, I'm wholly perplexed as to why AMD is currently trading below $50...Honestly, the current $22 for AMD makes about as much sense to me as did the $200 short squeeze price in the example above...When the current AMD "crosscurrents" subside , I suspect that AMD's price revaluation will be of about the same order and intensity as was the price devaluation from $200 in the example cited...An AMD price below $50, based upon any relative analysis that I can come up with, just cannot be justified...In fact, one can on a relative basis, quite rationally support any current price in the $50 to $150 range, imho!!! Any price outside that range defies any rational evaluation, imho!!!