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Technology Stocks : Neomagic Corp. (NMGC) -- Ignore unavailable to you. Want to Upgrade?

To: Mad2 who wrote (3194)	7/14/1999 9:42:00 AM
From: Kurt M. Matis	Read Replies (2) \| Respond to of 3645

Neomagic's problems aren't pricing pressure. The problem is that due to a shortage of flat panel displays, Notebooks are having a shortage of components. Therefore, OEM's only want to produce the higher end notebooks (higher margins). Now that there's a shortage, all those companies that originally wanted 128 chips want 256 chips. Regardless, Neo is looking to earn apprx. $0.70 this year (down from $1.43) based on this quarters earnings of $0.09/share. Therefore, the company would be trading at a 13-14 p/e (TTM), not 31. The real key is for Neo to get their design problems fixed with their 3D chips and put out a press release about the progress in their consumer products division. Once they do this, the analysts will realize that Neo is not just a graphics company and they have a strong future outside laptops. This is what SIII and ATI have both been doing in their most recent press releases. Finally, anyone who is looking to be "saved" by a buyout in the mid teens (or even low 20's), doesn't understand the true value of Neo's products and the future this company could have. Although the company is a little weak on the PR side, hopefully, the production side will more than make up for it.