Analysts are mixed on the stock, but average targets from analystsare between $24.00 and $25.00. The chart had been quite hard to notnotice last week when the market was in turmoil, but shares have given up a little more ground. Last week we noted how the stock hadn’t gotten thedown market memo, because it has been in an up-trend and its shares were down only about 3% from recent highs of $23.00. Shares are lower and closer to $21.50 now. That recent$23.00 high is within 10% of a 5-year high. On a static basis, option trader expectations late morning appear to bracing for a move only $0.40 to $0.55 depending on which contract you use. Keep in mind that with a Friday options expiration the time value will erode rapidly.
Interestingly enough, one of the things that has been helpingApplied out is its new and upcoming solar operations. After a coupleof recent solar and silicon related purchases and with the extracapacity that Applied has in its capacity arsenal, this solar operationis becoming a business that has the potential of becoming a dominantplayer in the coming years. It is even feasible that this could becomeits own entity to unlock shareholder value down the road, although thatis far too soon to predict or target.
Bets have been that despite a weak cap-ex market that it willchange or at least not deteriorate. Themain US chip equipment and cap-ex names to watch for secondary movementare KLA-Tencor (NASDAQ:KLAC), Novellus (NASDAQ:NVLS), LAM Research(NASDAQ:LRCX), and ASML Holdings NV (NASDAQ:ASML) in Europe.
Jon C. Ogg
August 14, 2007
Jon Ogg can be reached at email@example.com; he does not own securities in the companies he covers.