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Technology Stocks : Vitesse Semiconductor
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To: SI-Shark who wrote (785)8/5/1997 12:40:00 PM
From: NO Bull   of 4710
 
You are wise in your conern of being too early to short this stock. The current market capitalization of the stock is only $1,900,000,000.00 . At a multiple of only 17.5 times gross revenues and 50 something times projected earnings, the stock might appear expensive. In fact, the Chairman (Pierre R. Lomond), the President (Louis R. Tomasetta), the Chief Financial Officer (Eugene F. Hovanec), and two Vice Presidents (Christopher R. Garner and Ira Deyhimy) all sold stock in April/May at a price of $29 to $35 per share; so they must think the stock is fully valued at its current price of $50 per share.

Not withstanding all of the above, the 48% increase in VTSS stock price during the month of July may be only the beginning. Earnings per share for the 3Q ended June were up 90 percent. A few more years of this kind of growth and revenues could increase from the current $27.6 million per quarter to almost $200 million per quarter. That will make the current market capitalization of only $1.9 Billion look like peanuts at only 2.5 times revenues --- and this is only three years away. For a company in a non-cyclical business like semiconductors, a P/E of 100 or more might be only weeks away.

And that is NO Bull from New Orleans, Louisiana.

NO Bull
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