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: Kevin Hay who wrote (27280)	12/18/1998 10:42:00 PM
From: TechTrader42	Respond to of 70976

Kevin: When did you short AMAT, and how low do you expect it to go? I can't see it going below around 37, if it does pull back. And we may see next week whether it can break above the recent high of 47. Much will depend on the market, of course. If it falls, AMAT is certain to go down with it. Also, MU releases earnings next week and that will affect AMAT. Brooke

To: Kevin Hay who wrote (27280)	12/18/1998 11:47:00 PM
From: james paterson	Respond to of 70976

Kevin, You make a lot of sense & if you have the nerve to hold thru any further irrationality you will be O.K., providing you did'nt short to low. I was short AMAT several times from 36-45, but covered at 41 for a loss because IMO, it's a bad idea to short any stocks in a mkt bubble like we are now experiencing. I did make some money shorting NVLS, which I think is a safer bet. In short, if you are going to short in this mkt I think that you had better be very nimble, unless you have very deep pockets & nerves of steel. I must admit though that if AMAT gets near it's recent hi I'll be tempted to take another shot at it. James

To: Kevin Hay who wrote (27280)	12/19/1998 1:21:00 AM
From: Paul V.	Read Replies (1) \| Respond to of 70976

Kevin, You need to refer to Gottfried's Order and shipment chart which includes his latest data that he will post this weekend and then compare it with the AMAT's price comparison charts. IMO, you need to really go back to June 1996 to get an accurate chart of comparisons, read what Lester E., Tito, and others have been saying. From my references, I still have a DW near target of $64 within six months. I believe that AMAT will break the IBD's cup and handle of $54 within a couple months and, then, momentum will move in with Tito's senario of $63 to $100 setting in as AMAT moves toward another stock split by August. Naturally, the above is only my opinions and the data which I have reviewed from the Dorsey Wright site, IBD data, and this SI site. Readers are reminded the old saving, "caveat emptor (buyer/reader beware)." Paul V.

To: Kevin Hay who wrote (27280)	12/19/1998 1:47:00 AM
From: Jeffrey D	Read Replies (1) \| Respond to of 70976

Kevin:<<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>> Kevin, Theodore O'Neill of Needham has raised outlook for AMAT to .84 from .59 for 1999 and to $2.71 from $1.82 for 2000. So, taking your PE discussion and using Needham instead of Goldman you get the following: 1. 1999 PE 56 at present price of 45 2. 2000 PE 17 at present price of 45 3. Using Zacks 5 year average of 20.6 you get a stock price using Needhams $2.71 of 56............. I don't know, but it seems to me that there appears to be much more upside potential for AMAT than downside. I know, easy for me to say since I am long on it. Good luck on the short side. Jeff << U.S. Chip-Equipment November Book-to-Bill Ratio Rises Mountain View, California, Dec. 18 (Bloomberg) -- The U.S. semiconductor equipment book-to-bill ratio, which measures demand for U.S.-made tools used to make computer chips, rose to 0.84 in November as orders climbed for a second month. A ratio of 0.84 means that for every $100 of shipments, U.S. chip-equipment makers took in $84 in new orders. A ratio higher than 1.00 indicates a growing market. Semiconductor Equipment and Materials International of Mountain View, California, which reports the ratio, revised its October figure to 0.75 from 0.73. Orders for new equipment are ticking up after declining for 10 months to their lowest since March 1993 in September, as chipmakers scaled back plans to build new plants amid falling prices and oversupply. While orders were still 51 percent less than last November's $1.63 billion, the higher book-to-bill means that Applied Materials Inc., Novellus Systems Inc. and Applied Science & Technology Inc. may be poised for increased sales. ''The business has stabilized for all products, but it's going up for a select group of companies that have leading-edge technology,'' said Needham & Co. analyst Theodore O'Neill. ''This benefits Applied (Materials), Novellus and their suppliers more than anyone else.'' Applied Materials shares rose 4 3/16 to 45 5/16 in midafternoon trading of 11.3 million, making it the sixth-most active stock in U.S. markets. Novellus rose 4 3/8 to 53 5/8. Applied Science shares rose 1 to 9 1/8. O'Neill boosted his earnings estimates for Applied Materials, which he said is benefiting most from the recovery in orders. He raised his estimate for the Santa Clara, California- based company's earnings to 84 cents a share from 59 cents in 1999 and to $2.71 a share from $1.82 in 2000. Orders Improve November orders rose 29 percent to $805 million from $623.5 million in October, and 67 percent from $481.3 million in September, when the book-to-bill was 0.57. Semiconductor Equipment and Materials analyst Dick Greene said orders for equipment on the so-called front end of the chipmaking process were the ''major spark'' behind the rise in total orders. Front-end tools are used to prepare chips, deposit thin layers of wiring and insulation to build circuits and inspect for defects. Back-end machines test and package chips. Applied Materials, Novellus and KLA-Tencor are the largest makers of front-end chip equipment. The largest company to make tools for the back end is Teradyne Inc. All are included in the Philadelphia Semiconductor Index. The shares of KLA-Tencor rose 2 1/16 to 43 3/8, while Teradyne gained 3 1/8 to 41 1/8. Shipments rose to $962.9 million from $834.4 million in October and $845.7 million in September.

To: Kevin Hay who wrote (27280)	12/19/1998 11:39:00 AM
From: Ramsey Su	Read Replies (2) \| Respond to of 70976

Kevin, while I think your logic is sound, it may be outdated. You can apply your analysis to all the leaders such as MSFT, DELL, CSCO, INTC and come up with the same conclusion. They are all over priced. The investment world might have entered a new paradigm. The major change is the disappearance of the old individual investor. They have gone either online or have shifted toward mutual funds. They could also simply be so outnumbered that they are no longer a driving force in the market. The online investor over reacts with lightning speed today, creating over bought and over sold conditions. The number of mutual funds exceed individual stocks. This create a huge pool of "other peoples' money", managed by individuals whose objectives are quite different if the money were their own. Just like real estate with the frenzy buying by real estate investment trusts, there is no way that I will buy at the same prices as these managers, with OPM. Do you think Magellan gives a hoot about which stock to invest in? Their focus is how big the funds are and therefore the fees. Money flow and liquidity will drive the market much more so than in the past. Fundamental analysis, while still useful, has little to do with actual stock prices going forward. Even TA, has to take into account this new paradigm. I opine that this is a bubble that will burst. Unfortunately, I don't have the date yet. Like the Japanese bubble, it could go on for years before it bursts. Just my 2 cents. Ramsey

To: Kevin Hay who wrote (27280)	12/21/1998 2:26:00 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 70976

bought more nvls puts today, June 45s this time, to add to my collection. Double or nothing......no, I already did that.... OK, triple or nothing. Kevin: If October was the bottom of a V-shaped downturn, 1996-style, we're both going to be out a lot of money. If October was just the beginning of a prolonged U-shaped bottom, then we're going to see a series of false rallies, and there will be an opportunity to make a lot of money shorting/buying puts at the top of each one.