vtss nostalgia
Took a relatively small position back in the spring of '96 after reading the following recommendation in Smart Money (3/96) "10 Stocks under $20". A pretty sophisticated pick for a mainstream publication... Think they may have been on to something regarding mistaken identity... though it seems to go beyond just the name...
Maybe it's the style of the management, or the business niche, or the complexity of the product/process , or maybe they somehow just fall outside most paradigms,.. but there seems to be a real stealth quality to the company...even here on SI... Would guess that if someone ranked best performing/least well known or understood... Vitesse would rank up near the top... No complaints, but it is curious...
Am looking to pick up a little more on an infamous Vitesse "correction",.. Guess I'm hoping for some bad "news"... <g> ...
This is the only thread I've read where so much time is spent discussing/worrying about why the stock won't go down...and on that subject...
have been hoping for the thirties, but...
Smart Money (3/96):
"Vitesse Semiconductor
Nasdaq: VTSS ($8.08-split adjusted- other figures in the article have not been adjusted)
Vitesse suffers from a case of mistaken identity, a problem that stems chiefly from the word semiconductor in the company's name. In the stock market lately, that word has meant nothing but trouble, as predictions of oversupply in the silicon-wafer business portend hard times ahead for chip makers.
Which brings us to Vitesse. It doesn't make its chips from silicon. Rather, the company makes digital gallium arsenide circuits, which hum along at four to five times the speed of the average computer chip. That makes them perfect for specialized telecommunications, data transfer and defense applications where blinding speed is the name of the game. And it's won Vitesse a loyal following among clients such as AT&T, Ericsson and Fujitsu.
Vitesse owns a 60 percent share of the market for digital gallium arsenide chips and is poised for a boom. Wall Street analysts expect Vitesse's sales to increase 30 to 40 percent annually over the next few years. That is projected to catapult the company's per-share earnings from 17 cents for the fiscal year that ended September 1995 to 51 cents this year and 86 cents the one after.
So why hasn't Wall Street jumped all over this stock? Because investors haven't yet recognized just how different Vitesse is from the silicon-wafer gang. What if all the talk these days about silicon-chip troubles turns out to be mistaken! Then Vitesse will rebound along with the rest of the chip makers. But if the opposite turns out to be true? Vitesse's earnings will keep climbing while the rest of the semiconductor bunch sinks. No one is going to mistake this company then." |
