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Technology Stocks : Vitesse Semiconductor

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To: JK who wrote (4192)	8/22/2002 6:13:44 PM
From: The Ox	Read Replies (3) of 4710

Hi JK, I've voiced my concerns about VTSS and I believe they continue to be valid issues. However, I do believe that there is a bit of disconnect in this market from company fundamentals. Some might cry that VTSS is "manipulated" but To this I say "BUNK". I think that the stock is suffering from it's former "darling" status. VTSS could have done a lot to change their perception on the street and they have failed miserably over the past year while their markets were falling off the cliff. Their failure to react to the downturn is the main reason why the stock is where it is. The selling volume has been huge lately, since the stock has been booted from the S+P 500. VTSS has it's hands full and they need to substantially reform their ways, so that when demand improves, they can increase their fundamentals quickly. Having said the above, here's some things to think about: One small example of what I think is a disconnect between fundamentals for VTSS-- and I'll use ANAD for purposes of this demonstration. Around July 29, both stocks were trading at about $2.60/share. Since then, ANAD has risen 40% and VTSS has fallen about 45%. Here are a couple of statistics which I think are interesting and I point them out simply to encourage discussion. Since the start of each company's fiscal year (VTSS is 9months into the year and ANAD is 6 months in) A/R is up 13% for ANAD and down 12% for VTSS. Inventory is up 10% for ANAD and down 40% for VTSS. On SGA last qtr. ANAD spent $0.19/share and VTSS spent $.10/share. Both companies are spending on R+D, ANAD spent $0.25/share last Q and VTSS spent $0.21/share. Both companies had losses from normal operations of about the same amount, ANAD lost $0.29/share and VTSS lost $0.30/share. I understand that these companies sell to different niches and that the street might be expecting ANAD to rebound quicker than VTSS. I also think that the Asset value of ANAD is substantially higher than VTSS at the moment (on paper). It's interesting to me that VTSS has INVT and A/R moving in the right direction compared to ANAD, spends substantially less on SG+A and has seen it's stock price get cut in half while ANAD's has soared 40%.

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