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Technology Stocks : PMC-Sierra (PMCS)
PMCS 11.650.0%Jan 25 4:00 PM EST
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To: hey now who wrote (3206)3/9/2000 5:33:00 PM
From: hospitalman  Read Replies (3) of 3818
 
Here's some food for thought on pmcs. This is from a document off The Wall Street Transcript, an interview they did with Arun Veerappan from Robertson Stephens, his focus is on communications and semiconductor device companies.
1. "So the combination of robust demand and tightening capacity has really been a boon..."
2."I think communications is where the growth is. This is what the market is looking to in terms of future expansion, and I'm quite convinced that we're still in the early phases of a growth cycle."
3.He really likes brcm. He describes brcm as a company at the edge of the network, meaning closer to the user. Advantage is high volume. Disadvantage is rapid product turnover and pricing pressure. He cites brcm as the best example because they have "three or four product cycles working for it simultaneously."
4.He loves pmcs.He describes pmcs as being closer to the core of the network. Low unit volumes but long product life cycles. "So combining high intellectual-property content with long product life cylces, you have a very high gross margin and high profitability profile for companies at the core of the network."
5."So I would say this is where investors should over-weight their portfolios...".
6."There's a company that I cover called PMC-Sierra that I rate as a Strong Buy. They sell squarely into the core of the network. They have the best customer relationships in the industry. Their top customers are Cisco, Lucent, and Nortel, probably the best combination one could hope for."
7."Perhaps more significant is that 50% of their revenues comes from products that were introduced before 1995, 90% of their revenues comes from products that were introduced in 1997 and before. SO THE PRODUCTS THAT THEY INTRODUCED IN THE LAST TWO YEARS HAVE STILL NOT HIT THE REVENUE STREAM, AND WHEN THEY DO IT'S GOING TO BE BIG" (my emphasis added).

I know this was super long but this isn't the most active board in the world and I thought you might be interested.
Ken
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