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

To: Dave who wrote (24627)	1/21/2004 6:23:31 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

Dave, as I noted in my previous response, PE is just one of many ways to determine if the stock price is reasonable. I also noted that I prefered change in book value per share as a measurement of what the shareholders get from their investment. This isn't perfect either, because companies with a lot of proprietary technology don't show much value for their patents on the books. They show research expenses, but the patent itself is not valued as if it were land or buildings. Thus, the true value of SNDK assets (i.e., the intrinsic value) is greater than the figure for shareholder equity. OK, so where is the pessimism in this report? Looks to me like the prospect of lower margins turned off some investors. Also some investors may have misinterpreted the projected average selling prices of flash memory, assuming this indicates predatory pricing, when in fact it shows improvements in technology and manufacturing efficiency. It's just another version of Moore's Law. Taking all of these measures together, plus the subjective aspects that are difficult to quantify, including the technical problems in producing NAND chips, the stock looks grossly undervalued, with one exception. And that is the condition of the whole stock market and the economy. If the stock market remains fairly strong through the election, as I expect, I see no reason why SNDK can't reach about $90. Art