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

To: Paul V. who wrote (28589)	2/26/1999 11:11:00 AM
From: KM	Respond to of 70976

From Street.com: Return to the Bowling Alleys Investors who have driven up the price of chip-equipment maker Applied Materials (AMAT:Nasdaq) 186% since Oct. 8 have been waiting for assurance that revenue growth will justify the stock price. At a Thursday presentation at the BancBoston conference, CFO Joseph Bronson didn't disappoint. Applied Materials' customers are looking at revenue growth of 9% this year, driven by growth in sales of personal computers. Bronson now sees the possibility that demand in the chip industry will exceed production capacity in 2000 by almost 5%. "That hasn't happened since 1994," he said. "We are watching this very carefully. This is a very key thing." Why is this so important? Because undercapacity means that chipmakers have to expand their facilities. And to do that, they will have to increase their capital-equipment budgets, something the industry hasn't done in two years. But that's not going to happen this year. Bronson said capital-equipment spending will likely decrease 7% this year, and no more than five new manufacturing plants are coming on line. New plants mean new orders for equipment companies. "In good years," added Robbie analyst Sue Billat, "you could have many times that. Five is a very low number." If the big increase in chip demand expected in 2000 happens more quickly, chip companies might finally decide to complete the shells of manufacturing plants left unfinished when PC demand fell in 1997. "We call them bowling alleys," Bronson said. "Those fabs could be equipped." Bronson sees higher profit margins in the future as a result of Applied Materials' corporate restructuring during the recent downturn. Now if the company can gear up for a return to heavy business without heavy hiring, it can produce a 50% gross margin for the first time. Bronson had one last tidbit to tell fund managers: "For anyone who wants to buy the stock," he said, "it is down 4 points." It closed Thursday down 4 1/2 at 63 3/4.

To: Paul V. who wrote (28589)	2/26/1999 1:27:00 PM
From: Tito L. Nisperos Jr.	Read Replies (1) \| Respond to of 70976

Paul V, This Dip is materializing as a major Consolidation or a Time for those Left Behind to Catch Up or I simply call it as the resting point or Landing of the AMAT Staircase. Last month I did mention this:--- " ... The Landing or Resting period for AMAT and the Market (now it's clear to me after reading your Post and that of Big Bucks) will start after AMAT's Earnings report ... but not necessarily immediately after... ... But the Good thing is: --- Jan and Feb prices are traditionally lower than that of Apr and May. In a Bull Market such as we are now in, prices in the months of Summer/Fall are always higher than that of Apr and May in Spring... If we do not get the Lowest point for the year in Jan, we will certainly get it in Feb (sometimes the lowest occur in Mar). The thing we should not Ignore is the fact that the Market ALWAYS take a much needed Rest that last for a month or two beginning in Jan or Feb... We Bulls should take this opportunity to Load Up during this Landing period... Now the Question is at What price AMAT is going to hit the Highest HI before that YoYo Drop to as much as -21% ?... Here's a Hint: --- one day during the last Bull market we saw AMAT suddenly turned down after hitting 72 (all the while the rest of the Market leisurely going Up and Up). A day later there was a news about INTC's prospective earnings leveling off. Then one Lady Analyst issued a sell signal for AMAT (her reason was that her target price of 65 was already met. Analysts as we know now, issue Sell signals when stocks are going down not when they're going up). The stock dropped to just above 57 then slowly Clawed its way Up... " Now there's a general hesitation among AMAT traders whether to move the stock down some more or move it up to 63 (trading between 62 and 64) prior to that eventual run to 100... What we can do again is to take note of this Dip (71 5/8 to the present 56 13/16 is a bit less than 21% decline) and add this info to what we got in the 1997 Dip that saw the stock Dip from 72 to 57 9/16, just a little bit more than 20% decline... This way we could predict with more accuracy the price movements of the stock. I'm sure you and me and Others are going to put our money in AMAT (by buying CALLs or PUTs or by being LONG or SHORT) for a Long Long Time to come!...