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

To: Art Bechhoefer who wrote (26244)	6/28/2004 11:03:25 AM
From: Dave	Respond to of 60323

Art: RE: "[P]lease explain why a fast growing stock is selling at 14 times forward looking earnings, when, as you note, the S&P 500 is growing slower and is still at 18 times forward looking earnings." The question isn't top line growth, Art. The main issue with SanDisk is the bottom line growth. The real issue with this company is margin compression caused by increased competition. Margin compression creates quite a bit of uncertainty in the "E", which in turn creates uncertainty on its forward P/E ratio. Compounding on this issue is brand recognition. In this industry, there is none! Another reason for SNDK's precipitous decline is due to its relatively high stock price earlier in the year. That, IMO, is the reason why SNDK continues to underperform the market in 2004. Of course, I have maintained this stance since the beginning of the year. David