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

To: broozer who wrote (27109)	12/7/2004 4:30:55 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

$17 for SNDK? That would mean a forward looking PE of about 10, or it would mean that earnings will be drastically reduced. If unit sales remained flat and mb/unit also remained constant, then the scenario you have in mind is a possibility. However, everything I've seen in terms of expanding demand points to much greater unit sales, more mb/unit, and lower unit costs. So the lower prices received per unit do not necessarily mean drastically lower profits per unit but suggest instead a continuing improvement in productivity sufficient to enable a reasonable profit at lower unit prices. And if price cutting is as severe as you evidently assume, then the first casualties will be the higher cost producers or the resellers stuck with higher priced inventories. SNDK has been moving its flash memory production partly be introducing new products using flash memory. In other words, SNDK is creating new demand, which helps control what many believe is excess inventory levels at present. We'll know more about this when the financial statement comes out late January or early February. But from the anecdotal evidence I've seen, the earnings are going up, and so will the stock price. Unless the entire world economy goes to pot in the next six months, I expect SNDK will reach $30 long before it reaches $17. Art

To: broozer who wrote (27109)	12/9/2004 10:54:05 AM
From: Sam	Read Replies (1) \| Respond to of 60323

Your objective of exiting "SNDK at around $25" must be a new one, since they were selling at that price just last week. As far as SNDK's patents expiring, sure they will expire, but in this business, they will probably lose their value before they expire. And, at least given past R&D efforts at SNDK, will be replaced with other patents. re: looking for another entry point next year around $17 My guess is that if their recent low around 19 is broken all the way down to 17, it will signal more weakness in the sector and the stock. I agree with Art's speculation that 30 is more likely than 17, though you can never tell in this volatile business.