Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Ramsey Su who wrote (20324)	6/13/1998 9:13:00 PM
From: Jacob Snyder	Read Replies (3) \| Respond to of 70976

Ramsey: re: "This is rather troubling if everyone is assuming that 1998 is just a bad year and 1999 will be back to business as usual. The current stock prices certainly reflect those numbers. What if it takes longer than 1999? Using AMAT as an example, FY 1997 earnings were $1.39. FY98 is now at $1.38. If FY99 is eventually revised dn to $1, what type of a GROWTH stock do we have here? What PE should we be assigning to this cyclical? Which year's E should we use as a base yr?" I think, up until 3 weeks ago, when the stock was making its last of 7 failed attempts to break above 40, that most people were thinking that growth would return in 1999. Now they're not so sure. And neither am I. I just assume that if I buy at the point of maximal despair, and hold, that eventually AMAT will start being treated like a growth stock again. "Eventually" is as precise as I can be. Yes, EPS for 1998 will be 1.38, or lower. Last August, the consensus estimates for 1998 was about 2.70. Here's my 1999 earnings forecast, guaranteed to be accurate until I change it: EPS will be $1.50, plus or minus $1.00. When people start calling this a cyclical, and forget the long-term EPS growth rate, then it's time to buy. I don't use E. I use sales. Companies' can't play the games with sales that they can with earnings and book value. Also, it varies less. If you must use E, then use a 5-year moving average, to smooth out the waves in the rising sine wave of earnings vs. time.

To: Ramsey Su who wrote (20324)	6/13/1998 10:27:00 PM
From: Justa Werkenstiff	Read Replies (3) \| Respond to of 70976

I am anxiously waiting the earnings downgrades that bring the consensus to $0 for 1998 and 1999. With no earnings, one can argues that Yahoo multiples could be assigned to AMAT and then we should be over $100 in no time. Jim Morgan say we are trolling the bottom and gives a .20 - .23 earnings estimate for the quarter and Deahna multiplies it by a factor of four more or less to get his estimates for 1999(?). Hello? I am surprised that nobody seems to have picked up on the fact that Deahna thinks that 1999 will be worse than 1998 for AMAT. He sees 1998 at $1.24 and 1999 at $1.00 eps down from $1.85. Yes, I believe he may well be the first analyst to go one record that 1999 will be worse than 1998 for AMAT. Sure would like to hear his reasoning behind that idea.