Applied Materials (AMAT)

[PaigeCoverdale]

Standard&Poors Capital - KEEPS STRONG BUY RECOMMENDATION ON SHARES OF APPLIED MATERIALS

Ahead of Jul-Q earnings release due August 15, we trim our FY 12 (Oct.) operating EPS estimate by $0.04 to $0.80 and FY 13's by $0.04 to $1.10. We initiate FY 14 at $1.29 and up our 12-month target price by $1 to $15, on blend of P/E and price-to-sales near peers. We believe near-term downside is reflected in the shares and see a possible order rebound by calendar year end, making AMAT attractive along with 3.4% yield. We also remain optimistic on a recovery in flat panel display. We view positively anticipated cost cuts and the recent appointment of Gary Dickerson as president.

Applied Materials - On March 5, 2012, Applied's Board of Directors approved a new stock repurchase program authorizing up to $3 billion in repurchases

S&P rates them a strong buy, they are buying back stock and there is a 3% dividend. With new developments in NOR and NAND memory and hyperthreading, chip makers will soon need to replace their chip making equipment, but, because of the sector, this stock will ebb and flow, it is just an intrinsic condition, the silicon chip sector is cyclical, but now is an awesome time to buy.

Disclosure - I am long on this stock.