Mike, I had the 1973-74 experience and you do not want it!! Let me put it in the context of DELL. DELL at its high had a price of about $70
and a P/E of about 50. In '73-74 the first leg down was $60, which we just had in 1998. The only trouble is there were about seven more legs down and the stock would have ended up at $7 with a P/E of 5. Yes, there were lots of stocks that ended up with P/E's of 5. Almost everyone, including me, got killed because even the value investors would have been buying DELL at $15 and lost half their money.
As far as LTXX is concerned the two best pieces to read are the last quarterly release and the front page article in the 3/23/98 edition of Electronic News - see post 1152 on LTXX thread for URL.
I think the comment about not buying a second tier tech company because lower sales means lower R&D dollars and falling further behind
is very astute. However, that would tend to apply to a small tech company trying to be a "full-service bank" so to speak, as opposed to selecting a niche where the resources it has are enough to keep it competitive. VTSS is a great example of a second-tier company that has done very well in its niche. The companies trying to compete with Intel on microprocessors are the other side of the coin.
The appeal of LTXX to me, for a modest amount of money, is the balance sheet and relative valuation to peers CMOS (somewhat larger) and TER
(much larger), and the foresight described in the Electronic News piece with their Fusion product - the "catalyst". The problem is I
do not have the technology knowledge to assess the likelihood of success, and have to rely on customers buying so far (Hitachi) and
company (biased) and analysts comments.
IF LTXX is successful with the current strategy, the price could triple. If they are not you could probably get out at $3.75 book value or better by the time you find out. I wish all my stocks had those odds. |
