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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: BWAC who wrote (6741)	8/13/2003 12:34:44 PM
From: Return to Sender	Read Replies (1) \| Respond to of 25522

Great post! >Let me remind you. Take the 5 year period of 1998 thru 2002. AMAT average earnings (without charges) was 55 cents per year. This included the bubble and the bust. Average was 55 cents. That is approx a 35 PE right here. When AMAT hits $55 this cycle it will be a 100PE on average. When it hits $12 in this cycle it will be fairly priced and safe to buy long term.< I'm very cynical myself. Those were average earnings of 55 cents per year factoring in a total boom cycle 1998 to 2000 without the actual cost of stock options factored in. Without the company paying even as much as a small dividend to investors. Last night AMAT missed on revenues, lowered guidance but today CIBC raises the stock target to 27. Now I am not at all backing off on my thought that AMAT will trade back near 20 again soon but my question is why? What if AMAT has to expense options? Does that cut future earnings by 25% or more a year? I think it does. What if investors finally realize that the capital equipment industry is not a growth industry but a cyclical industry and demand a dividend? What if investors stop chasing analyst's recommendations and simply assign the same kind of valuation to high tech stocks like AMAT that we do to automobile manufacturers or the company that builds equipment for their assembly lines? A lot of what if's that will eventually be some of the excuses that take the stock back to 12 but first perhaps we will see the high 19's or perhaps even dare I say it... 27 RtS

To: BWAC who wrote (6741)	8/13/2003 2:58:51 PM
From: robert b furman	Read Replies (2) \| Respond to of 25522

Hi BWAC, Unless of course all of the rightsizing leverages leaned out companies that have drastically reduced employee count and facilities. Way back when Cohu was originally on track to sell 200 million annually they had multiple buildings SanDiego and Littleton Mass. Since they haver purchesed ASE from Schlumberger and rolled Ase's Columbus operations and Littleton all into one building in Poway. The emplyee count is well below 50% reduced and they're very cash flow positive at 30 million per quarter in revenue. I think it is a mistake to say that with an uptick in orders the E.P.S. won't increase dramatically. Keep in mind that at the top everybody(most people) extrapolate future earnings into the heavens and on the number multiples expand. This is nothing new in the SCE sector.One has to be intuitive at the bottoms and tops. The usual cycle swing is more than enough to not sweat the top 10-15% or bottom 10 - 15%. It's a very emotional roller coaster - this time much longer in time duration (because the last top was such a powerful distribution). Future tops should be more subtle and very hard to hit.None the less it will be a good ride. JMHO Bob When the numbers confirm it - it will be too late.

To: BWAC who wrote (6741)	8/13/2003 7:22:08 PM
From: Lizzie Tudor	Read Replies (2) \| Respond to of 25522

Let me remind you. Take the 5 year period of 1998 thru 2002. AMAT average earnings (without charges) was 55 cents per year. This included the bubble and the bust. Average was 55 cents. I'm sure amat and most tech companies will earn much more this cycle than during bubble peak, due to offshoring. Cisco is the best example of the trend, people are dumbfounded as to where their profit is coming from. It is because they offshored half the company. Amat, same deal.