------------------------LSI--------STM----------CUBE----------ESST
Price($)-----------34.75----68.75---------36.875----------31
EPS($)--------------1.11--------4.5-------------(2.24)---------0.45
PE---------------------31.3-------15.27---------nm(16)---------68
shares(M)-----------128.7----138.9---------38.6-------------37.8
volitility----------------46.6--------37------------63----------------99
net margin(%)----20/14/9-----na-----------na--------25/23/21
Among the four companies, STM has the lowest PE, highest EPS, lowest volitility, it seems to be a good buy.
LSI's net margin has been dropping for the last three quarters in a row. The operations need to be shaken up.
Cube's write-off of Divicom resulted net loss, therefore the PE is not meaningful. Can you comment on the PE if Divicom acuisition is not counted. I agree with most pundits on this thread that Cube is a good buy even though it is weak on this chart.....
ESS's write-off of $30m is included in that PE, otherwise its 1996 PE will be 25. (30M/37.8 = $0.79 reuslts $1.24 EPS). In fact, 1997 EPS is projected at $1.6 to $2.00 with PE of 15 to 25 as a range. This will result a $24 to $50 price range for 1997. The good thing about ESST is its net margin, even though dropping in the last 3 quarters, but it is above 20%, much better than most IC companies.......ESS is likely to maintain its net margin above 20% for 1997 as well. ESSt is the smallest of the 4 maybe that is also why it is the most volatile. Do you know how volitility was defined and calculated?
Can you comment on the 1997 prospect on LSI, Cube and STM? Also can you provide projections on the net margins on these three companies?
My personal position is long on both Cube and ESSt with more holdings on ESST. Because of relative smaller sizes of Cube and ESST, they will have more growth potential than LSI, definitely much more than STM can achieve.Thanks for your post, I will look into STM more seriously from now on.
Mark |
