CRUS, good buy? Message Board

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Technology Stocks : CRUS, good buy?

CRUS 142.78

+1.9%

Feb 6 9:30 AM EST

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To: Jan A. Van Hummel who wrote (5658)	4/22/1998 6:57:00 PM
From: ted quinn	Read Replies (3) of 8193

Say what????? <$7/share in cash and equivalents. With the stock trading at/near $12/share this means that for $5/share you can own a ($1 billion in sales) company that grew 35 % on comparable quarter basis earning 18 cts/share.> Your calculation of $7 a share cash includes the $5 a share that CRUS owes the bondholders. That is not CRUS' money--it has to be paid back (and shows up on the balance sheet as long-term debt.) And they are paying interest on that money, too. So, $7 - $5 = $2 a share cash. Next, you say the sales grew 35%. I don't think so. They got some one-time only patent money -- by including this they puffed up their numbers. It is disingenuous on the part of CRUS to include that when in fact, sales growth on year-to-year or quarter basis was negligible. On top of that, gross margins were puny for the 8th straight quarter. And why do you think CRUS should trade for a PE of 25-35?? Only growth companies trade for that. CRUS has been shrinking for 3 years already. And their fab investment is killing them, another huge write-off. Their competitors in audio and CDROM -- ESST and OAKT-- are hemorrhaging money because of razor-thin margins. CRUS has the same problem.

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