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

To: davesd who wrote (13757)	12/22/1997 2:52:00 AM
From: 16yearcycle	Respond to of 70976

"What is it worth if they earn $1.40 per share??" 1) AMAT's long term roe is 22.5% 2) Current stockholder's equity = $2,800,000,000. 3) Over the next 5 years, amat would earn an additional $4.7 billion.At the end of year 5, earnings would be 1.4 billion.Shareholders equity would be about 6.3 billion. 4) AMAT has sold at an average of 20x e over time. In the past 5 years, it has sold at 6-41x e. 5)In light of its past performance, and viewing those potential earnings, I would place amat's current value between 12.5 billion and 15 billion. This is 20x e of 630 million, which is current equity x 22.5%. I would expect that amat can trade for over 30 billion well within those 5 years, which would be $90+ per share. 6) AMAT's value will steadily increase from 12.5 to 30+ over 5 years. The stock will be volatile as hell.

To: davesd who wrote (13757)	12/22/1997 8:49:00 AM
From: Proud_Infidel	Read Replies (3) \| Respond to of 70976

Re:What is it worth if they earn $1.40 per share?? Dave, Will you give no weight to mgts. guidance pf $2.08-$2.15? Disregarding their projections entirely and lopping a third of eps off for FY98 implies a lack of confidence in mgt. If this is the case, why would you want to invest ant all in AMAT??? AMAT mgt gave their guidance on Nov. 20, after the asian debacle had already begun. I have stated numerous times that they have assumed order cancellations into their forecasts, otherwise we would be looking at a FY98 of $2.50. Ian, I think along the same lines that you do. People have little foresight(or imagination) as to what the future will bring and what applications will be DRAM intensive. They are around the corner friends...we just cannot see them yet. Voice recognition, which is here today, runs like molassess on even the fastest machines. Once this is incorporated into say MS Office, are you telling me we will not see a surge in upgrades?? I for one can say I am anxious for the day all of this hunting and pecking is over with once and for all. DVD will play on PC's currently, but not the same full screen quality you'll get on a TV, assuming there are applications running concurrently. The point I am really trying to make is that there will be additional applications that haven't even been dreamed of yet, which will run slowly on even 1 Gigabyte of DRAM. They are out there being produced as we speak, so sell your AMAT shares if you think nobody will ever need additional DRAM/logic power. After all, only several years ago most PC's came with 40MB and 4 MB of DRAM and the Dave Dhillons we saying at the time "who needs more than 4 MB?" The only thing that is certain is that this cycle will continue for the forseeable future. Regards to Both, Brian

To: davesd who wrote (13757)	12/22/1997 1:45:00 PM
From: Paul V.	Respond to of 70976

Dave, >What is it worth if they earn $1.40 per share??< It all depends on what value that Wall Street places on AMAT. Remember, that when EPS was at its lows it price was at its highs this past upcycle when it reached $108 presplit. At a 30PE you have $42, at 40PE you have $56 and at AMAT'S high pe of 49.5 you have $69.30. I just saw on CNBC, 1:15 EST, an interview with Edward Yardeni, a guru, who CNBC saw has been right on the button, quote, "1998 will be a bull market but 1999 will be a bear market." If Yardeni is right what value will AMAT have by July and August. This morning, Dorsey Wright indicated that semiconductors were oversold and a good buy. Only time will tell. We could have a banner year Regards, Paul V.