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Technology Stocks : Vitesse Semiconductor
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To: retireddvm who wrote (706)7/10/1997 1:46:00 AM
From: Dan Spillane   of 4710
 
I guess my worry would be that if I follow analyst projections here, the VTSS growth rate for next year and beyond is around the 33-35 percent rate; that is, next year 1.13 EPS vs. this year .84. So at 38 dollars a share, we are already trading at 34 times FY98 earnings, not to mention 45 times FY97 earnings. Am I missing something?

Perhaps we are being taken for fools and should ignore the analysts projections for '98? Or, perhaps we will be pleasantly surprised on the upside, and estimates will go higher.

For myself, I have removed money from Vitesse and have re-deployed it in other stocks trading at fractions of both FY97 and FY 98 growth rates. Check it out, nice hunting amongst certain networkers and other specialty semiconductor companies.

Now, perhaps we will have a nice EPS surprise...but right now things look risky on paper. Perhaps this explains the large insider sales.

Dan
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