I agree that the press releases over the past few days, with the execption
of the Faroujda news, was to be expected and thus should not have added
to the performance of the stock. What you may be minimizing is that these
press releases, while anticipated, reassure Wall Street that S3 is not losing
market share. IN fact, some of the design wins are for higher grade
models that s3 typically positions itself in. After all, this is not a stcok
trading at 40 x future earnngs, nor is it a new market participant with
earnings of less than $50 million per years (as many of s3's competitors do).
In the end, a shareholder of s3 has to feel comfortable owning a company
at 13 x reduced earnings. In a market that is growing 300% a year, in which
s3 has huge market share and manufacturing efficiencies to maintain its
competitive pricing, and given its recent entrance into the cinema quality
video arena, I consider s3 an excellent investment.
Heck,if I had the money, at 12-14 time this years' and 10x next years, I
would buy the whole company and given the growth rate, pay off the
financing within three years and everything thereafter wouldbe pure
profit.
This is exactly the computations that possible suitors will undergo and
exactly the analysis any investor should consider before owning stock
in a company.
I think the s3 analysis produces favorable results.
regards,
steve |
