Intersil - ISIL Message Board

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Technology Stocks : Intersil - ISIL

ISIL 22.49

0.0%

Feb 27 3:00 PM EDT

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To: Jack Hartmann who started this subject	3/27/2004 6:26:13 PM
From: Czechsinthemail	Read Replies (1) of 467

Value discussion of ISIL: post.messages.yahoo.com Here are some excerpts: ISIL's last earnings report shows annual revenues for 2003 at just under $508 million. If you use that number with the 2004 estimate of $603 million, you get a percentage increase of about 19% -- not including XICO revenues. That's higher than all but one of the companies you listed. If we make the same XICO-related adjustments you used, the numbers look like this: $508M + $41.5M = $549.5M for 2003 $603M + $82M = $685M for 2004 The percentage increase is 25% -- higher than all the other analog companies you listed. Since you suggest the growth assumptions for XICO are probably too high, perhaps a better description of ISIL compared with other analog companies is that it has an above average growth rate that is likely to improve with the addition of XICO. It will improve if XICO's revenue growth rate for 2004 is above 19%. The other thing that your comparison left out was the valuations of ISIL compared with the other three. Looking at price/sales, ISIL's 6.26 is lower than those of LLTC (17.24), MXIM (12.61) and ADI (8.27). Your comparison also excluded cash per share. ISIL's cash/share is $5.86 (before adjustment for the XICO acquisition). That is higher than that of LLTC ($5.40) and MXIM ($4.05) and only slightly below that of ADI ($6.17). If you adjust those numbers to reflect the considerably higher share prices of the other three companies, you get cash as a percentage of share price that looks like this: ISIL: 26% LLTC: 15% MXIM: 9% ADI: 13% Granted that these ISIL figures are not adjusted to reflect the XICO acquisition, but I think they support the view that even before the XICO acquisition, ISIL was priced lower yet growing faster than most analog companies. They also helps explain the logic of the cash plus stock deal, since ISIL was relatively cash rich with a relatively low-priced stock.

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