CATS - Catalyst Semiconductor Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : CATS - Catalyst Semiconductor

CATS 25.89

+1.6%

Jul 2 5:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Winner Victorious who wrote (65)	12/13/1995 9:54:00 AM
From: Tom Claugus	of 231

Winner, I can tell you because I am on conference calls with Dataquest and other supposed industry experts that they aren't geniuses and it is very tough to tell when the oversupply will come. But one thing is a fact and that is if you go back and look at industry cycles it always happens. People make too much in a commodity product, everyone gets excited, and then the herd runs out and builds plants until there is no tomorrow. The last semiconductor downcycle began in 1986-1987 and it lasted through 1991-1992 (5 years). During this period, commodity memory manufacturers were making little or no profit. Just look at Micron and IDTI's historical financials and you will see how big and hard these semiconductor cycles are. In 1990 Micron was earning 1% on sales... now they are earning 30%. In 1991, IDTI made 1% on sales, in 1992 they lost $32MM and now they are making 20% on sales. Imagine paying 9 times current earnings... which is what I did when I bought IDTI at $13.75, but earning go down 20 TIMES a year from now... that would take the P/E from 9 to guess what... 180!!! Frankly I am nervous about my IDTI position with a one to two year perspective. Management has not changed since 1992 when IDTI was losing money so have they become instant geniuses? Have they developed a new fangled product that is wowing the masses? NO! It is simply that supply does not equal demand and they are selling a commodity product that results in the undersupply/oversupply phenomena I have outlined before. I obviously agree that if there is no oversupply in SRAM that SRAM companies will be a great buy here (its so obviuos its obvious). The problem is history shows repeated boom bust cycles in semis and the odds are that history will repeat itself. When is the question that if you or any other people could answer would make you a very rich and well respected individual. I don't profess to know when it will happen but I will buy when they stock prices hit what I predict will be their lower level. As an example the numbers I am cal- culating show that IDTI could hit its lowest low of about $7.50/sh. believe it or not. I wish I knew the answer and I am currently working on it. Good Luck, Tom Claugus

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next