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

To: Pam who wrote (27832)	4/5/2005 5:20:01 PM
From: Road Walker	Read Replies (1) \| Respond to of 60323

Pam, Honestly, I think you are right, a lot of good things are being priced into the stock. And that's why it has been out performing it's peers over a three month period. One thing I've noticed over the years is that it's easy for the market to underestimate what pricing power can do for a semiconductor/commodity company. If you have falling costs, flat prices and increasing volume, fixed cost as a percentage of revenue can decline dramatically. The street often underestimates the impact on the bottom line. I THINK it's going to be a real good quarter for SanDisk, and I'm long, uncovered, with a liberal stop on the stock. (So run for the hills!). I may chicken out as we get closer to earnings... John

To: Pam who wrote (27832)	4/6/2005 11:08:10 AM
From: Sam	Read Replies (1) \| Respond to of 60323

Well, FWIW, my opinion is that it's the same old same old. Recall last April when SNDK came out with a stellar report, and the stock sold off afterwards due to "margin worries." Well, in general, those worries came to naught--except for one quarter, SNDK has managed to beat expectations pretty handily since then. I don't think most analysts know how to deal with SNDK. They try to treat them like they treat the DRAM companies, especially I think MU, but flash is different kind of market than DRAM and SNDK is a VERY different company than MU is or, IMO, ever was. Aside from their IP which helps to protect them, they are simply far better managed than MU. But analysts always work by analogy, and because there were gluts in DRAM, and the same companies are involved in flash, they presume that there will be gluts in flash too, which puts a cap on flash companies' PE. The fact that SNDK is expanding into value added software markets may--hopefully will--change this when the pdts get out there. If the perception grows that flash is a different kind of pdt than DRAM--something that ELI has tried to point to in some CCs of the now distant past--and that flash markets can continue to expand and explode for at least another 4 or 5 years due to continually expanding uses, then also perhaps the PE of flash companies can expand. For the moment, though, there is obviously a large supply in the mid-28s, then there should be another large supply in the low 30s. If 33 or so is taken out, though, the low 40s should be doable, IMHO. But first things first. None of this will happen on speculation. There may be a speculative move to 30 or so before the CC, but I wouldn't count on it much. We'll have to see how Mr. Market views Eli's future projections and what other companies say about their flash plans and--even more importantly, about their flash progress. Because so far, it seems that they have had some problems ramping their flash production, and that lack of progress, IMHO, isn't in SNDK's stock yet. I think the analysts' assumption has always been that there wouldn't be any problem for the DRAM makers to do flash as well, and that is why there would be a flash glut. If that assumption is wrong, and if (as we on this board hope) the DRAM need SNDK's IP to be competitive, then the stock should get back to 40s, IMHO. Sorry for rambling, not enough time right now to be more succinct. Gotta go.