Applied Materials (AMAT)

(A Top Pick Jan 25/18, Down 37%) Sold it in August around $43. The cycle has suddenly changed; semis have gotten hit. AMAT isn't a semi company, but a semi equipment one. But there's weak demand of this product now and US restrictions on selling chips to China doesn't help. This could rally if there's a US-China deal.

A semi-conductor equipment company, selling parts for the semis' production lines. Semis are being used in more and more applications in, say, cars and data centres as A.I. grows. AMAT is a big player in producing semis. But there are
concerns about cyclicality, but overall this business is attractive.

He's been short semis which has cyclical earnings, and this cycle has run its course. He wouldn't play this sector now. It has peaked. This is not a bad holding though.

He is not into the computer equipment space. He does not buy into the high inventory levels at a peak margins – a classic red flag – in his opinion. He is concerned they will not be able to grow into the current valuation.

emiconductor names have been swept downward because of concerns about demand. Took a stop loss, he’s out of it for now. Stay out until you see blue sky at the end of the tunnel.

They make equipment for the semiconductor industry. She rarely invests in this sector. The sector is very volatile and recently, pricing across the industry has come down. She won’t consider investing in this until she sees stability in their end customers and the pricing environment that those customers face.

He's owned this on and off and made some money. The key driver was China's semi-conductor industry, which Trump kieboshed when he went after ZTE. Wait 2-3 months. Don't buy now. There's more downside to come.

Semiconductors are doing their own thing. This is old tech. Model price is $85 with a 100% upside. But it is a cyclical. Over the last three years it has been on a tear and is pausing here. He would e a buyer here – a small amount.

Bought the stock a couple of months ago. Still puts strong numbers. Multiple is less than 10 times earnings. One of the concerns is that the semiconductors companies pulled back on their order books a little bit. A buying opportunity. You are exposed to all the hot tech areas with this company.

(Past Top Pick, January 25, 2018, Down 18%) It's in the crosshairs of the trade wars now. They make machines that make microchips. AMAT is involved in many industries, so it's still well-positioned, especially in A.I., the next big wave in tech. 10x earnings which are still growing and will grow the rest of 2018. Generating lots of cash. They recently increased their dividend and buybacks. It's a little risky to enter now, but if you hold it, it's worth it.

His model price is 78% higher than the current price. AMAT is a cyclical stock, like Micron. There has been a major positive move since 2015. It is common in cyclicals to see earnings continue to rise after a major move but the stock only go so far and that’s what’s happening with AMAT. If there is any hint of a slowdown in tech, this stock would roll over big time. There is no sell signal yet, but unless there are signs of another 2-year cycle, AMAT will see pressure.