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Teacherman1 (56.09)

Heads up on AMAT

Recs

7

July 28, 2010 – Comments (2) | RELATED TICKERS: AMAT

If you are looking at their Solar business ( for which they just announced a $400M writedown), you might think they are on a downward trend, but their core business of manufacturing the equipment that chip makers use, than it is a different story.

Their primary manufacturing facility for this equipment is located in the Austin, Tx area, and my local paper had an interesting article on them a day or so ago.

For the past three years, including as recently as Feb. of this year, they had been laying off employees in order to bring their costs in line with their production expectations. They went from 2,500 full time, plus contract employees, down to 1,500 full time, plus contract employees.

They just announced they will be hiring 200 new workers within the next 60 to 90 days. 100 will be full time and 100 contract. While this is not a huge number, the fact that they have gone from laying off to hiring is significant.

They stated that their sales of chip manufacturing equipment has increased dramatically, and that they expect it to continue to grow.

Just some info. from an "on site" perspective in case you want to take a closer look at them.

I have had them on my start limit list for some time, and will be taking another hard close look.

As always, a reminder to do your own DD before you act, but this might be a time to take a position.

JMO and worth exactly what I am charging for it. 

2 Comments – Post Your Own

#1) On July 28, 2010 at 1:58 PM, djshagggyd (73.97) wrote:

Very interesting, I will definitely keep my eye on them. Thanks Teacherman!

~djshagggyd 

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#2) On July 30, 2010 at 10:42 AM, Teacherman1 (56.09) wrote:

Took a small position. Will add on "bear panics". This is a $15.00 to $20.00 stock that got beaten down because of their ill advised venture into the solar sector. Now out of that and back to their main business of manufacturing chip making equipment.

I had intended to buy it earlier when it was around $8.00, but I waited too long.

Since they should have been on the backside of a recovery in the chip business, I thought I had more time to buy in. Didn't keep an eye on it and it ran up on me. 

Decided to take advantage of this dip on the solar charge off.  

Good for a long term investment with a dividend and a 70% to 80% upside, or as a shorter term investment with a 30% to 40% upside. 

Their main manufacturing plant is only about 10 miles down the road from me.

Downside in minimal from here. 

JMO and worth exactly what I am charging for it. 

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