Ocassionally you find worthwhile material on Yahoo:
<<With credit to Azad94087
Semiconductor (NASDAQ: VTSS) and Anadigics
(NASDAQ: ANAD), have come to dominate the fast-growing
niche.
Hans Mosesmann, an analyst with Prudential Securities,
figures that the usage of GaAs chips will rise sharply from
current levels. In 1999, the typical wireless phone used $2
worth of GaAs components. That figure should soon rise to
$7 or $8. Cable TV set-top boxes are another driver. Old
style analog boxes used $2 worth of GaAs chips per unit. But
the newer digital models "could increase to $5 and potentially
up to $10 by 2002.
Over the last 12 months, each outfit has boosted sales and
per share profits more than 50%. And analysts expect that
growth to keep up over the next few years as well. In the
current fiscal year, each company is expected to boost
profits at least 60%, while 2001 should see an additional
35-50% in profits.
The recent tech sell-off was especially brutal for the pair of
GaAs chip makers. Vitesse saw its shares fall 50% from
peak to trough, while Anadigics fell an eye-popping 74%.
Though the stocks rebounded last week, they're still well
below their all-time highs.
Like many tech stocks, it's hard to call either stock a bargain
based on current earnings. Both trade for more than 40 times
projected 2001 profits.
But on a price/sales basis, which is a more meaningful metric,
each stock sells for half the multiple it once garnered.
Moreover, competitors such as PMC/Sierra (NASDAQ:
PMCS) and Broadcom (NASDAQ: BRCM) are much more
expensive. PMC/Sierra sports a price-to-sales multiple of 87,
and Broadcom's price-to-sales multiple is 57.
Of the two, Anadigics would look like the relative bargain as it
trades for only nine times sales, compared to a multiple of 30
times sales for Vitesse. Vitesse, on the other hand, has made
a series of key product introductions and acquisitions that
should help it to snag even more contracts in the quarters to
come, indicating higher growth rates.
Either way, this is a great time to pick up shares of these
next generation chip developers.
Stocks for the Next
Correction >>
The above sharpens the focuss on ANAD and VTSS as "value plays" :-)
in this comm. chip niche.
L |
