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: Big Bucks who wrote (23840)	9/6/1998 8:18:00 AM
From: Duker	Read Replies (1) \| Respond to of 70976

Big Bucks, With a broad brush, I agree that AMAT will/should probably announce a buyback at these levels (+ or - 15%). However, there are some restrictions surrounding share repurchases surrounding M&A activities. Please do not read into this. I have no special insight. But, we all know that AMAT approaches M&A like a "mini-investment bank" -- I am not sure if that is a good thing or a bad thing! It would be nice to see some M&A activity. This would help better define the bottom of the cycle (e.g., the O/O acquisitions in the last mini-trough). I view the M&A progression like this: 1)Admit there is a problem -- "no more" orders. 2)Lay-offs (or more benign, pleasant-sounding alternatives like VSMs). 3)Take as many charges as the accounts will allow. I am a particularly big fan of the Impairment of Assets charge. It is non-cash and it really boosts returns during the next upcycle (healthy dose of cynicism). 4)Play to the party-line: "We at [you name the company] use downturns to strengthen our product portfolio internally...It is very difficult to dedicate engineers when we are trying to simultaneously ramp product..." Some truth...some twaddle. 5)Evaluate the portfolio and make the classic "Make or Buy" decision. 6)Find yourself in the middle of the upturn without the capacity to satisfy demand. I can give no time line for the entire punchlist or the time table between items. --Duker P.S., Have a nice Labor Day.