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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Donald Wennerstrom who wrote (15368)	5/24/2004 3:52:17 PM
From: Gottfried	Read Replies (1) \| Respond to of 95580

Don, nobody knows what 'appropriate' cap spending is, since Mark never defines it. That way he can continue to sow doubt without having to present evidence. I put Mark on 'ignore'. :) Gottfried

To: Donald Wennerstrom who wrote (15368)	5/25/2004 5:06:03 AM
From: The Ox	Read Replies (2) \| Respond to of 95580

It appears the analysts who are "negative" on the sector have forgotten some of the fundamentals of investing. Let's start with the AMAT eps numbers. EPS of $1 this year and $1.30 next year would be 30% eps growth. 30 X $1 = $30 PRICE TARGET! Even if we assume only 20% eps growth in '06, we still get a price target of 20 x $1.56 = $31. This would be a 63% return on one's investment if they bought AMAT at $19/share and were able to sell at $31 some time in the next 2 years!!! Not too shabby but I guess these types of returns rate a HOLD or Underperform rating. Note that Cary has AMAT eps estimates above $2/share in 2006 or 2007, if my memory serves me correctly. Of course, his numbers imply a much higher price target for AMAT! Let's move on to NVLS. I doubt that they can sustain the expected 70% increase in eps yoy that the estimates imply (.98 and 1.68) but let's use the same 20% growth as I used for AMAT. This gives us a 2 year target price of $40 ($1.68 x 20 = $2.02 eps x 20PE) or greater then 33% return from today's price. Now let's take a peek at KLAC. The expectations are for 100% earnings growth from 2004 to 2005! Let's slice this down to 30% for 2006 and we get a price target of $92!!! ($2.36 x 30% = $3.07 x 30 = $92! Even a 20PE on $3 eps is a $60 price target or 33% gain on today's price) These price targets are completely out of sync with the "calls" being given by these "expert" analysts. They feel free to drastically reduce the multiples on concerns of "maturity" (or whatever nonsense they want to include with their negative spin) to keep the masses from purchasing these stocks. Keep in mind that the above 2004 and 2005 estimates are from the "nay" sayers. Some of the bulls on this sector have even higher eps estimates, which imply even higher price targets. I understand the caution we have on this thread with respect to the current down trend but anyone who can look beyond the negative analyst spin should be able profit nicely down the road. The analysts are saying one thing and estimating something completely different. What are we to believe? Their eps estimates or their negative spin? They can't have it both ways, imo! Either their eps estimate are WAY TOO HIGH or their calls are WAY OFF BASE! I know which answer I come up with!