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: Paul V. who wrote (27279)	12/18/1998 8:29:00 PM
From: Kevin Hay	Read Replies (6) \| Respond to of 70976

why I'm short amat. to sum up: It's overpriced.., unless they add a .com to its name. first, look at btb chart provided by Xy Zhao: geocities.com observe: a. 5/97, btb ~ 1.1, 8/97 btb ~1.05 now look at amat 2 year chart: quote.yahoo.com 5/97 amat @ ~30, 8/97 amat @ ~48, peaking at ~52 shortly after. btb amat 1.10 30 1.05 48 0.84 45.5 today.. btb correlation is out of whack, momentum player feeding frenzy b. back to the btb chart: note: that every move up of about of 30-40% has been followed by a sizable decline. sep-oct btb of ~.57 to .84 is a 47% improvement. Given the decline in manufacturing, over capacity/cutbacks from most chip makers and the choppy historical pattern of btb, never mind asia in the toilet, I see no reason to expect btb to continue to improve without more pull backs. *High probability that btb will pull back in coming months. c. pe expansion 5 year average pe: 20.6 -Zacks current pe: 67 (yahoo) pe on this yr eps 75 oct-99 (price of 45/eps of 0.60 ) pe on next year's 27.8 (oct-2000) 45/eps 1.63 this year eps from today's goldman announcement: 0.60 for 1999 next year eps from Zacks **assuming it's rational to write the next year off AND that the y2k expectations are solid, amat's pe is still high. using 5 year average 20.6 's 1.63 = a price of ~34 also, 24,000 shares sold 9/8/98 at 25 by insider Paul Low 32,000 " " " " 11/20/98 at 39 by Michael Ofarrell So, besides interest rates being low and momentum madness can some one tell me why I've made a bad decision? thanks, -Kevin ps. Goldman's estimate increase only brought them in line with consensus.