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Subject:  Re: Help me. Is AMAT a RM? Date:  3/28/2000  7:44 AM
Author:  rundwp Number:  5856 of 8329

I'll give the ultimate wishy-washy answer.

"It depends"

As for competitors, try Novellus, KLA-Tencor, Teradyne, and if you can can get the relevent info, Nikon and Tokyo Electron. You will probably find, as I did, that Applied Materials has a distinctly superior balance sheet.

What prevents it from being a Rule Maker? The flow ratio is too high, 1.5-2.0, which is actually quite good for this industry. Gross margins run around 50%, so it hovers just around Rule Maker criteria. (The story is similar with net margins). Debt is not a problem. In addition, the volatility and cyclical nature of the business is a concern, and the industry is not for the technically faint of heart.

AMAT is clearly the Rule Maker in the semiconducting equipment industry, even if AMAT probably falls a little short in the overall Rule Maker criteria.

But as you can probably guess, I think it is a great investment, and am indeed long on AMAT.

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