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Technology Stocks : Semtech (Nasdaq:SMTC)

SMTC 80.52

+0.5%

Jan 23 9:30 AM EST

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To: A. Wayne who wrote (1002)	1/25/2000 9:25:00 PM
From: Leeza Rodriguez	Read Replies (1) of 1225

Wayne, The group profiled by IBD on Monday were the 'Semiconductor -Electronics group'. As I mentioned previously, one column of numbers (the operating margins) is in error, so we should tread carefully when utilizing the data. Having said that, the data displayed indicated the following info : company--------------- operating margins----------PSR (PSR= market cap / trailing 4 Q sales) Applied Micro Circuits ---------26.1%-----------------62 Cree -------------------------- 29.4%--------------- 42 QLogic------------------------- 33.2%--------------- 36 Broadcom-------------------------27.6%-------------- 32 Xilinx --------------------------28.6%-------------- 17 Analog Devices ------------------17.8%---------------12 So, what I am proposing is that since SMTC operating margins are ~26% (and rising), a PSR =13 is definitely NOT outrageous. In fact, we exist in the Land of Sanity. Furthermore, we could even make the case that compared to it's peer group of similar operating margins, SMTC is somewhat cheap. Leeza Rodriguez

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