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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (5753)	11/14/2001 7:18:25 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 99280

Haim, are you of the opinion that the September 21st low was only another low on the way to many other much lower lows? I think that you need not be a full to suggest buying AMAT in the $25/$28 area (which is where I did recommend it). The reason is quite simple. AMAT earnings power two years hence is well in the range of $2 plus per share. I carried out an interesting calculation on the most recent bookings in the industry, at the current rate of $700 MM/ month, you have INTC ordering $400 MM per month (assuming that they will cut their capex from $7.5 B this year to let sat $5.5 B next year) and the balance of $300 MM per month is simply service contracts throughout the industry. That leaves no capex for anyone else. That cannot stay like that for a very lengthy period. AMAT as been selling a $40 due to the intrinsic assumption that sooner or later, orders will be booked again. If it is later, as I expect, AMAT could easily revisit the low $30, if it is sooner it may not even stay under $40 for more than a month or so. As for interest, AMAT is a well run company with in essence, $4.8 Billions in cash and short term investments and only some $500 Mm in long term debt (no bank debt to speak off). Most other companies have more debt than the have cash, so they should benefit from low rates. Ford just went to the well recently for some $7 B if memory serves, the lower rates environment allowed them (despite their deteriorating rating) to get an interest rate smaller than they would otherwise. Zeev