from wsj
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DSP Group Up 11% After Salomon Reiterates Buy Rating
By Tom Locke
DENVER (Dow Jones)--DSP Group Inc. (DSPG) shares were up 11% recently, and Salomon Smith Barney analyst Elliot Prince attributed the rise to his reiteration of a buy recommendation before the market opened Thursday.
Prince's note was distributed through First Call Corp., which gave Salomon's clients a look at the recommendation, and he also issued a note to the Salomon sales force, he said.
Prince couldn't think of any other reason for the stock's rise Thursday. "Not in a down market," he said. "I spoke with the company today. They're not aware of anything else either."
A DSP Group spokesman was not immediately available for comment. The Santa Clara, Calif., company develops software and computer chips used in cellular phones, hearing aids, and other digital signal processing devices.
Prince said that by Wednesday the company's stock had declined about 25% since Nov. 30, when it closed at 20 7/16, and he considered the stock to be a good buy because it was trading at less than 10 times expected earnings for 1999. Other intellectual property stocks are trading at about 25 to 30 times next year's expected earnings, he said.
CIBC Oppenheimer Corp. analyst Robert Adams concurred. He said most leading semiconductor stocks are trading at 30 times expected earnings for 1999. DSP Group's Thursday increase was likely attributable to "investors looking for value in a group that has otherwise taken off," he said.
Shares of DSP Group were up 1 3/4, or 10.9%, at 17 3/4 recently on volume of 344,800 shares, compared with average daily volume of 117,395. The shares were as high as 18 5/8, a 16.4% increase, earlier Thursday.
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