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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: GST who wrote (113235)	12/21/2000 8:57:16 PM
From: craig crawford	Read Replies (1) \| Respond to of 164684

As I have been saying this week, just buy companies that have dominant positions in their industry with lots of cash little debt and seasoned management. That's not companies like AMZN who were hatched during the last few years when all you had to do was ask for more money and it was handed to you. That's not companies like CMGI and ICGE who blew a couple billion dollars in a year. They have never had to make it through tough times. It's not companies like CIEN and JNPR and BRCD which have PE's in the hundreds with no room for error. I'm talking companies like SUNW & INTC, AMAT, & CSCO who have been around for 15-20 years or more and have had to deal with recessions before. AMAT is starting to look real cheap here. I might have to buy some calls on that tomorrow. You could make a reasonable case that AMAT is looking at a PE in the single digits. Of course it's entirely possible that next years numbers don't hold up, but when the Fed starts easing you can grow more and more confident about the numbers. AMAT is expected to earn $3.25 next year and the numbers have come down already. It's entirely possible that they need to come down a bit more. Now you take AMAT's closing price today of 35 3/8 and divide that by 3.25 and you come up with a PE of 10.88. But then, take a look at the balance sheet and see that AMAT has well over $4 billion in cash and minimal debt. Subtract the cash out and you can knock another 5 bucks off the share price for your calculation. 30.375 % 3.25 = PE of 9.35 Not a bad bet when the Fed is on the brink of easing, tax loss selling is abating, and the market is extremely oversold. I wish it hadn't broke to new lows today, but then most stocks are below recent support and are broken anyway. A lot of chart followers don't get you in at the bottom.