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: Gottfried who wrote (21085)	7/4/1998 7:23:00 AM
From: Justa Werkenstiff	Read Replies (4) \| Respond to of 70976

GM and All: Much has been made of leading indicators to suggest a stock price turnaround in AMAT. I recall the Infrastructure charts you referenced recently: Message 5039497 They looked at monthly bookings for both front end and back end separately (two charts) and searched for a correlation between those figures and stock price movement. Cowen and Company did a study last month and searched for the best leading indicator of an industry upturn. Cowen looked at total front and back end book-to-bill, DRAM pricing, first and second derivatives of DRAM pricing, total front and back end orders, capacity utilization and others. It then plotted these measures against the stock price for AMAT in search of the best correlation. Their conclusion was that the best correlation that served as a leading indicator for upward stock rallies is total orders as reported by SEMI. They found that a minimum turning point in total orders as measured by a three month moving average has preceded major price movement in the last two cycles. Here are the three month moving averages I calculated since August 1997: August 1400.50 September 1468.53 October 1518.00 November 1595.06 December 1589.03 January 1515.66 February 1382.46 March 1240.06 April 1136.86 May 1089.86 As we all know, May showed a slight uptick in total orders. However, anecdotal evidence suggests orders have dropped off since then. The three month moving average helps to smooth out these aberrations. I do not know how successful one might be in catching the bottom with such an approach. If someone wants to graph it and post their results, it might prove interesting. I don't have access to the graph at this time. Anyway, it is interesting to know what at least one institution will be looking at. Cowen sees DRAM demand/supply equilibrium in Q2 1999. I think they are just echoing AMAT's guidance. They are looking for increased spending at the .18um level going into 1999.

To: Gottfried who wrote (21085)	7/4/1998 9:01:00 AM
From: stockycd	Respond to of 70976

I don't think this was posted... pubs.cmpnet.com

To: Gottfried who wrote (21085)	7/4/1998 3:47:00 PM
From: Proud_Infidel	Read Replies (2) \| Respond to of 70976

GM, You bring up a good point- nobody has a crystal ball so invest when things look bad. IMO, that is right now. Of course there are those holding out waiting to get their prices, but Greed works on the downside as well as the up. These people may miss the upturn. In Nov '96, when things were still shi**y in the group, AMAT announced that visibility was clearing up and the stock gapped up 8+ points the next day. Buy when RS is the weakest and sell when it is the strongest. BTW, I believe that DW %'s were in the 15% range a couple of weeks ago and have since moved up. Someone please correct me if I'm wrong. Brian Re: Lehman's "optimistic" outlook I think it is now time to begin discussing how long the next upturn can last. The longer the downturn the more prolonged the upturn. Can AMAT really earn $7 in the next 4-5-6 years? I recently visited the SFAM site and saw this post: exchange2000.com Notice the 75-80 for AMAT and the 7.4 for SFAM. If AMAT can continue its dominance in new markets, I don't think anyone should laugh at the prospect of the #'s in the Lehman report at least before doing some addl DD. AMAT is not the 800 lb gorilla, they're the 1000 lb gorilla. Forgetting this fact can lose you $$(I own LRCX and SFAM)