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Technology Stocks : Vitesse Semiconductor

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To: lazarre who wrote (1712)	9/26/1998 11:46:00 PM
From: Robert Schwartz	Read Replies (1) of 4710

A repeat of a post I made last week when VTSS was at 23. Since the stock is now above 28, it surprises me to see so many posts with so little faith! Excepting possible fallout from Asia (not to be under-estimated), this stock seems to have much more up than down-side potential. ----------------------------------------------------------------------------------------------------- I understand from prior research that the material "gallium arsenide" is 4 times faster than "silicon". If so, how can silicon ever replace the market for gallium arsenide? It seems to me that silicon would be likely to fade out over time if it is unable to keep up with continued performance demands As far as valuation is concerned, Vitesse is currently trading at 28 times 1999 earnings estimates. If the current estimates are correct (big "IF"), I don't believe there has been an opportunity to buy VTSS so "cheap" over the past 3+ years. This hardly points to the stock being "over-valued" as has been so often misstated over the past 3 years in regards to VTSS. Last quarters book-to-bill ratio was very strong if I recall correctly. VTSS has been constrained in the past by manufacturing capacity. The new facility (CO Springs?) should allow for more rapid growth to meet the pent-up demand. Large, global companies have not yet begun to tap the potential of the internet and electronic commerce. With the exception of some retail businesses (e.g. Amazon.com, CDNow, etc.), e-commerce is in its infancy. The communication equipment manufacturing sector should see tremendous growth over the next 5 years. Does VTSS go down from here? Possibly. We could be entering a global recession. If so, everyone loses. If not, I can think of fewer businesses with as much potential as VTSS.

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