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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Donald Wennerstrom who wrote (81542)	10/28/2018 1:19:09 AM
From: Elroy	2 Recommendations Recommended By Kirk © Return to Sender Read Replies (1) \| Respond to of 95574

The problem with PE ratios when the cycle is on the way down (the forward actual results are going to deteriorate to less than the current current forecasts) is that the analysts never lower their forward EPS numbers enough. We all know WDC's EPS is going to decline next quarter, but we don't know if that is the trough the EPS heads up two quarters from now, or that is just the beginning and the EPS is going to decline for the next 8 quarters in a row. Analysts will never forecast the disastrous latter outcome. As a result, on the way down their forward EPS forecasts are 1 - almost always too high, and 2 - meaningless, since they also don't know the depth of the downturn. It looks like to me that MU and WDC have some very good numbers compared to the other stocks in the table. garbage in garbage out. For price to sales and price to book value, all of these stocks have been through these cycles so these trough metrics exist. The idea is when AMAT had $500 million in maybe sales maybe it bottomed at 2x sale, and now that they have $5 billion in sales, all else being equal, perhaps this time it will also bottom at 2x sales. Something like that. Same discussion with price to book. But there is no guarantee the previous price to book or price to sales will again be the bottom this time. If this down cycle is worse or better than previous down cycles, that affects things. And if AMAT's market position is worse or better than it was in previous down cycles that also affects the bottom valuation. I used to be a semi cap equipment analyst (for a whole year!) at a i-bank in the late nineties, and we had software services that provided historical data which could product price to book and price to sales charts, with lots of options to modify the data, and it was useful. I have no idea where you can get that historical data for free on the internet, but it exists in proprietary software data package solutions.

To: Donald Wennerstrom who wrote (81542)	10/28/2018 12:10:21 PM
From: Return to Sender	1 Recommendation Recommended By Donald Wennerstrom Respond to of 95574

S&P 500 Tumbles as Amazon, Alphabet Disappoint 26-Oct-18 16:20 ET Dow -296.24 at 24688.31, Nasdaq -151.12 at 7167.40, S&P -46.88 at 2658.83 briefing.com [BRIEFING.COM] The S&P 500 lost 1.7% in a volatile session on Friday, in which it never touched positive territory. Disappointing earnings reports from Amazon (AMZN 162.81, -139.36, -7.8%) and Alphabet (GOOG 1071.47, -24.10, -2.2%) rattled a fragile market pestered by peak-earnings concerns. The benchmark index briefly dipped into correction territory, characterized by a 10% pullback from a prior high, before it took a sharp turn upwards in late morning trading. Nevertheless, the comeback proved futile, as stocks eventually rolled over again. The 11 S&P 500 sectors all finished lower. The Dow Jones Industrial Average lost 1.2%, the Nasdaq Composite lost 2.1%, and the Russell 2000 lost 1.1%. A stronger-than-expected advance Q3 GDP reading (+3.5% actual vs +3.3% Briefing.com consensus) took a backseat in Friday's trading action to Amazon lowering its fourth quarter revenue guidance and Alphabet missing third quarter revenue expectations. The encouraging headline GDP figure, though, was tempered by the understanding that real final sales, which exclude the change in private inventories, increased just 1.4%, marking the slowest growth rate since the fourth quarter of 2016. Amazon and Alphabet weighed heavily on the underperforming consumer discretionary (-3.6%) and communication services (-2.4%) sectors, as their disappointments filtered through to other growth stocks, which have been beaten down sharply this month on valuation concerns. Facebook (FB 145.37, -5.58, -3.7%), Netflix (NFLX 299.83, -13.04, -4.2%), and Apple (AAPL 216.30, -3.50, -1.6%) also backpedaled from notable gains in the previous session, adding pressure to the communication services and information technology (-1.9%) sectors. In other earnings news, Mohawk Industries (MHK 115.03, -36.04, -23.9%), Western Digital (WDC 44.19, -9.82, -18.2%), and Colgate-Palmolive (CL 59.58, -4.24, -6.6%) contributed to angst over future earnings growth. Flooring manufacturing company Mohawk cited weakening demand, inflation, and pricing pressures for its lower outlook; Western Digital said customers are being more conservative, resulting in softening demand; and Colgate-Palmolive encountered profit margin pressures from higher raw material and packaging material costs. Conversely, Dow component Intel (INTC 45.69, +1.38) easily beat consensus revenue and EPS estimates for the third quarter and issued fourth quarter guidance that exceeded analysts' average estimates. Shares of the chip maker finished 3.1% higher. U.S. Treasuries prices rose, as the market turmoil drove some safe-haven positioning. The 2-yr yield decreased five basis points to 2.81%, and the 10-yr yield dropped six basis points to 3.08%. The U.S. Dollar Index traded 0.3% lower at 96.37, though not far from its two-month high. Overseas, markets closed on a downbeat note amid the early negative price action in the U.S. market. Reviewing Friday's economic data: Real GDP increased at an annualized rate of 3.5% (Briefing.com consensus 3.3%) while the price deflator checked in at a lower-than-expected 1.7% (Briefing.com consensus 2.1%). Personal spending (PCE) was robust, up 4.0%, which was the strongest pace of growth since the fourth quarter of 2014. PCE contributed 2.69 percentage points to the change in real GDP. The key takeaway from the report is that real final sales of domestic product, which subtracts the change in private inventories, were up just 1.4% -- the weakest growth rate since the fourth quarter of 2016. The final October reading for the University of Michigan Index of Consumer Sentiment was 98.6, down slightly from the preliminary reading o 99.0 and the final September reading of 100.1. The key takeaway from the report is that consumer sentiment has not been unduly affected by the stock market sell-off or the jump in interest rates. The outlook for consumers is still rooted in feelings about job security. Looking ahead, investors will receive PCE Prices, Personal Income, and Personal Spending for September on Monday. Nasdaq Composite +3.8% YTD Dow Jones Industrial Average -0.1% YTD S&P 500 -0.6% YTD Russell 2000 -3.4% YTD