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

To: Drake who wrote (21249)7/9/1998 12:24:00 PM
From: 16yearcycle  Read Replies (1) | Respond to of 70976
 
"Rick, I concur. AMAT's 5 year average PE is 21.4 -- times Alex Brown's 1999 estimate of .97 = $20.76/share.
How do you justify a price of $30?"

Trough earnings receive higher than average pe, peak earnings receive lower than average pe.

i don't make the rules, but this is how the game is played.

the real point is that peak earnings were about 1.80. Multiply that by 8-10, and you see the problem with a 29.25 share price. We are staying high because the whole market is at record valuations.



To: Drake who wrote (21249)7/9/1998 9:19:00 PM
From: Vartan  Read Replies (1) | Respond to of 70976
 
<Rick, I concur. AMAT's 5 year average PE is 21.4 -- times Alex Brown's 1999 estimate of .97 = $20.76/share.>

Just as in good times 1.37 would be too optimistic, .97 might be too pessimistic in bad times. I doubt Brown has a clear picture of Asian economy for the next 12 - 15 months.


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