PMC-Sierra (PMCS) Message Board

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Technology Stocks : PMC-Sierra (PMCS)

PMCS 11.65

0.0%

Jan 25 4:00 PM EST

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To: ms.smartest.person who wrote (3666)	8/14/2000 10:35:37 AM
From: Thomas DeGagne	Read Replies (1) of 3818

I read this article over the weekend. A very good overview of the current state of the industry. "Mr. Bujnowski says that even in the worst case scenario -- one in which cell phone and PC sales drop off dramatically -- chips will continue to be in short supply at least for the next year." Note: Cell phone and PC sales have NEVER dropped off dramatically in the history of the industry. Growth has dropped off, but sales have never been down y/y. Unit growth has always grown strongly y/y. When growth slows it is the memory producers who get slammed and right now there is a memory shortage. The cycle is in the early stages. "SAFE HARBORS A stock like PMC Sierra (Nasdaq: PMCS) may certainly seem expensive, trading at about 141 times 2001 earnings estimates, but it has a safe demand in supplying chips for broadband infrastructure suppliers like Cisco Systems (Nasdaq: CSCO) and Nortel Networks (NYSE: NT). Analysts are expecting the company to post a 40 percent annual gain in earnings over the next three to five years." 40%???? How about 30% sequentially!!! That's 186% per year folks. With growth like that the stock is not really overvalued. But there is no room for error.

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