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Technology Stocks : LSI Corporation

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To: shane forbes who wrote (12458)	5/17/1998 1:47:00 PM
From: thomas hayden	Read Replies (1) of 25814

I have a few fundamental questions about LSI and was hoping the big brain power on this thread could help me out. I think LSI is getting back into the buy range again, with long term support in the 20 area dating back to '94. I was reading the Value Line review and a couple things struck me that I didn't understand. The first was by how much the split adjusted number of outstanding shares was growing by. In 1994 LSI had about 100 million split adjusted shares outstanding, currently there are about 140 million outstanding. They must be issuing lots of stock options to their employees, and also really dilluting our equity in a big way. Does this concern anyone? My next question is about the following chart : 1995 1996 12/31/97 Cash 685 717 490 Receivables 231 185 210 Inv. 139 90 102 other 80 58 67 total assets 1136 1051 870 Acct. Payable 165 104 211 debt due 56 69 44 other 173 171 182 current liab. 395 345 438 My question is what caused current assets to take such a hit while liabilities continued to increase. We went from a current ratio of 3 to 1, to a current ratio of 2 to 1. That is not a good trend and does it concern anyone. Lastly one quote they mentioned didn't sound real positive. "the company will continue to contribute to Sony's DVD player, which should enjoy good growth, though likely not to the extent that optimist had hoped" That last little phrase doesn't sound real positive. From what I have read on this thread you would think LSI owns the DVD market, but it seems they may only be a small player. How will that affect LSI? It seems that CUBE will be big time into DVD, they have already signed a deal to supply gateway's DVD products. On a positive note LSI traded as high as 60 while earning only 1.75 in 1995. Value Line thinks they can earn 3.40 by 2002 or so which should propel to 100. I'm still nervous though what a big time sell off in this market or a recession would do to this company. Thanks for your input.

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