Robin, glad you asked! It forces me to back up the BS I spout!
First, I think the networkers, (the biggest part of Xlnx Market) have been in a down turn. I expect this to change in the October quarter.
Xlnx had a downturn in growth 2 quarters ago, and is now increasing revenues again.(see profiles on SI. The company has told analysts that revenues will be flat this quarter. I expect a pick up in the October quarter. I read 1 analyst who expects the slowdown to last until the March 98 quarter.
On the charts, the stock just took a big hit, and is sitting on its 200 day moving average. This is the bottom of a trading range ($46) that it has been in since September 1995.
The P/s is 6.8, the p/e is 35.9. 5 year averages are 5.6 and 34.3 respectively. 3 year revenue growth average 46.6%.
Thus, I think you can buy this stock now below its long term growth rate. p/s is in less than Altera, Cisco, and others. I think a flat quarter is discounted in the stock price. In case of a whole market downturn you may get it cheaper, but otherwise, 46 is about as cheap as it will get. You may have to wait 2 or 3 quarters, but with 90% proprietary product and 61% gross margins, over a 1 year time frame, I think you will do well.
All this, of course, IMHO!wj |
