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

To: Jacob Snyder who wrote (19198)	5/8/1998 9:46:00 AM
From: Teri Skogerboe	Read Replies (1) \| Respond to of 70976

J, I think your post hit the nail on the head. A related story. May 7, 1998 (SEOUL) -- Net losses in 1997 nearly doubled for the 276 companies listed on the Korea Stock Exchange, after the exclusion of profits generated from intersubsidiary business deals. The Financial Supervisory Board and the Korea Stock Exchange said that after assessing the profits of listed Korean companies last year based on a consolidated financial sheet, those companies posted a total net loss of 8.245 trillion won (US$6.15 billion), a 97.58 percent rise compared to a total net loss of 4.615 trillion won when profits from intersubsidiary business deals were included. Samsung Electronics Co., which posted a net profit of 123.5 billion won in 1997, ended up with a net loss of 608.9 billion won based on a consolidated financial sheet. LG Electronics, which posted a net profit of 91.5 billion won in 1997, ended up with a net loss of 572.8 billion won based on a consolidated financial sheet. Total debts of the listed companies rose 36.53 percent, from 286.271 trillion won to 1,070.8 trillion won, based on a consolidated financial sheet, while total net worth fell 3.44 percent to 103.9514 trillion won. The numbers not only displayed an over reliance on intersubsidary business deals among major Korean companies, but also showed that insolvencies at a major company's subsidiaries led to insolvencies at parent companies. One of the major reasons for the declining financial health of major corporations was insolvencies at overseas subsidiaries. A total of 203 firms, or 73 percent of all listed firms, had their profit volume reduced or transformed into losses when based on a consolidated financial sheet. Only 71 listed companies, or 26.25 percent of all listed firms, saw their net losses reduced or net profits increase based on consolidated financial sheets. Only two listed companies, Kohap and Hyosung T&C corporations saw their net losses transform into net profits when based on consolidated financial sheets. The 92 listed subsidiaries of the top 30 conglomerates saw their total net losses of 130.3 billion won rise 23 times in size to 3.1425 trillion won when based on consolidated financial sheets. Per group, Hyundai saw its 5.2 billion won net profit turn into a net loss of 900.1 billion won when based on a consolidated financial sheet. Also, 10 other business groups faced the same situation. (Maeil Business Newspaper, Korea)

To: Jacob Snyder who wrote (19198)	5/8/1998 1:49:00 PM
From: Proud_Infidel	Respond to of 70976

Jacob, One thing you failed to mention in your post was the fact that because of the low interest rate/unemployment environment we are currently in, stocks are trading at premiums accross the board. Thus, using historical #'s for AMAT or any other co. really won't work in this environment. DELL is currently trading at about 25X YR2000 eps, AOL is at about 100X FY99 eps.......The list goes on and on. Assuming that 1999 is the turnaround year for the equips, it is not unlikely that we'll see $3.00+ for FY00 for AMAT. Again, assuming this scenario in this environment, can it really be said AMAT is overvalued at 12X FY00 eps???? Especially since coming off of a year with eps in the $1.40 range, AMAT should see their eps take off not too long from now. Read: The poor year in earnings only makes for a larger eps percentage mover over the coming years for this stock. Certainly DELL will not see this type of % growth. Thus, looked at on a price to eps growth, AMAT IMO is one of the most undervalued stocks in the current universe, even at current prices. The above scenario does not take into account: * The fact that AMAT is and has been taking market share from rivals in all segments. * Mgt. is working to achieve higher NM's during this next upcycle. * AMAT has entered new areas(metrology) and is rumored to enter the lithography market through an acquisition of SVGL in the coming months.(Lithography represents greater than 30% of capital spending) All of the above of course can be disregarded if one assumes that the current slump will be prolonged indefinitely and we will no longer need newer faster IC's. Brian

To: Jacob Snyder who wrote (19198)	5/8/1998 9:08:00 PM
From: MileHigh	Read Replies (2) \| Respond to of 70976

Jacob, I have posted here irregularly lately...I appreciate your comments. I currently own zero shares in AMAT. Great company, but am still waiting for some clearer direction. FWIW, and it probably is not worth much, but I do not see the semi equip sales cycle firming any. Just a gut feeling as no one can predict the future, but I do see Morgan saying that orders remain soft and the 6-9 month outlook will still be unclear. This will not probably move AMAT down significantly, but some may sell if they bought AMAT recently looking for a firming sales cycle. I do not see it thought. I always read this board! Great commentary. Regards, MileHigh