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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Mitchel S. Untracht who wrote (10863)	11/12/1997 8:53:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Just curious, but how do you come to the conclusion that INTC and AMAT are overvalued? They are both trading at discounts to FY98 eps predictions. In addition, AMAT is 6 mo. into an upward cycle(although some would argue the cycle is ending prematurely) and should warrant a premium well over its growth rate seeing that the % increase in eps should be impressive over the next few years. FY98 eps ~ $2.15 and FY99 eps ~ $3.25. Based on these numbers, AMAT(in theory) should warrant a p/e of approx 51 on TTM e. Of course this is stretching it because AMAT will not be able to maintain this level of growth. But if one says AMAT is overvalued when it is trading at 13X FY98 e one is not looking at reality IMHO. Regards, Brian