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

To: Big Bucks who wrote (25156)	10/10/1998 12:50:00 AM
From: David Rosenthal	Read Replies (1) \| Respond to of 70976

BB, OK. See if I get this right. You are saying that if they break even that fair value is around $20.00 per share (and about $21 if they make less than a dollar next year) from which you get your initial buy price of $22. Question 1: What about the 1.8 Billion in liabilities? Even if cash flow is neutral doesn't this affect enterprise value? Question 2: How good are the assets? Is a lot of this 3.6 B inventory? That has decreasing value over time. Question 3: If they only make 2.65 B in revenue next year (2.4B + ~.70/s) then shouldn't they get more of a haircut on general principal? Excuse me if my questions show gross ignorance or if I misunderstood your post. You actually got me thinking about this instead of blindly following PE or saying that AMAT is a Gorilla therefore it must be a good investment. Thanks, Dave

To: Big Bucks who wrote (25156)	10/21/1998 4:58:00 AM
From: klaus pluszynski	Read Replies (1) \| Respond to of 70976

All, I think that an earnings warning from AMAT is highly likely during the next weeks. Please correct me, if my reasoning is wrong. Here's why: Historically, AMAT revenues are quite closely related to orders reported by SEMI. Their stated revs. had been at +/-30% of the reported SEMI order numbers during the last years. Semi reported less than $500 mil. in orders for September. Taking the moving average mechanism into account, this means a total of $1.5 bln in orders were received from July to September by all the US semi eq. mfgs. That would put AMAT's share of the bookings (and revenues) at roughly $500 mil. and therefore way below their stated breakeven of $600 mil. Comments? Klaus