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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Ausdauer who wrote (24617)	1/21/2004 5:55:28 PM
From: Art Bechhoefer	Read Replies (2) \| Respond to of 60323

This is the best report yet, for several reasons. Note that book value per share is up over 100%, from $7.10 to over $15. To me, this is one of the best measures of performance, as it shows the growth in shareholder wealth and fully justifies a price much higher than we're seeing in after hours trading. Looking at $2.03 earnings for 2003, one can easily justify a PE of 45 to 50. Looking at revenues for 2004 of about $1.7 billion or more gives a price per share/sales per share ration of less than 4. Some investors may think this is a bit high, but for a company with this kind of growth, it is actually quite low. I'd say the stock would look fully valued somewhere near $90. Another way to judge the stock is that the current price is just over 4 times book value. You could easily justify 8 times book value, given the kind of growth in demand we're seeing, together with virtually no long term debt. And I liked the phrase "exquisitely exacting" used by Eli to characterize the manufacturing process for NAND chips, explaining why new suppliers will not have an easy time ramping up production. Also, did you note the $1.3 billion in cash? That's equal to more than $13/share in cash, which is another way of saying that with the stock price near $63, the market is actually valuing the company and its technology at only $50 per share. Whoever was doing the selling after hours was the true sucker! Art