Silicon Investor (SI) -- The First Internet Community

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 : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: Black-Scholes who wrote (45927)	10/8/1999 3:06:00 PM
From: BillyG	Respond to of 50808

And the one trick pony was being mounted by a CUBE stallion!

To: Black-Scholes who wrote (45927)	10/8/1999 3:12:00 PM
From: BillyG	Read Replies (1) \| Respond to of 50808

Compare ZRAN and CUBE (reprint). And benefits to CUBE of a MOT buyout of GIC......... fnews.yahoo.com Stock of the Day Sep 14, 1999 C-Cube Microsystems: Riding the Video Disc Wave by Adam Lowensteiner 9/14/99 C-Cube Microsystems (NASDAQ:CUBE - news) used to be a darling technology stock on the NASDAQ. In early 1996 it traded at nearly $70. However, by late last year it had fallen back to the mid-teens. Now, after beating analyst estimates in the second quarter, it is finally starting to live up to its hype. Granted C-Cube exceeded the Street consensus estimate of $0.27 a share by a mere penny, nothing to brag about. But a couple of recent announcements have re-perked interest in shares of this tech stock, which closed Monday at $33.64. C-Cube is one of a few companies to supply digital video disc (DVD) players with a semiconductor that is embedded in the DVD machines. C-Cube's technological breakthroughs do not end there. The company's chips can be used for other sorts of digital video, and could be useful in the up-and-coming high-definition television (HDTV) market. C-Cube also runs a division called DiviCom, which is involved in the deployment of digital video networks. DiviCom is a leading provider of open solutions for digital television. DiviCom products enable digital video broadcasting over a variety of networks including satellite, wireless, fiber and cable. What really attracted investor attention last week was an announcement that C-Cube lowered its prices on an encoder chip, which has the best quality for its application. This high definition broadcast encoder chip-set will allow television stations to transmit the industry's highest quality high definition video to consumer homes. News like this is important to C-Cube investors as it solidifies a future area of business for the company, the high definition market. Although high definition television is still in its toddler years, there are many analysts who believe it will become a solid business with time, like the DVD market. C-Cube has not only prepared itself for the future by keeping its pipeline full of ideas. The company also carries a strong capitalization it can fall back upon. The company only has $25 million in long-term obligations, which is less than 10% of the $293 million of its shareholders' equity. Also, the company has about one-fifth of its market cap in cash, or a total of $240 million. This money could be used for future acquisitions, but has so far been used to help fund DiviCom, which C-Cube is placing a lot of weight on to help take them to the next level. Indeed, DiviCom and General Instrument (NYSE:GIC - news) recently chose C-Cube for the next generation of high definition encoders. C-Cube's products were also selected by Pace Micro Technology, a provider of digital set-top boxes in the United Kingdom. Under the deal, C-Cube's chips will power 90% of the digital cable set-top boxes. DiviCom, C-Cube's subsidiary, recently won a digital deployment for Time Warner Cable (NYSE:TWX - news) , which will enable Time Warner customers to combine analog cable programming with a new digital service. This deal has only begun to touch C-Cube's top line. Arun Veerappan, an analyst with BancBoston Robertson Stephens, defines C-Cube as a 'pure-play digital video company.' C-Cube trades for a mere 29 times its trailing earnings. Competitor Zoran (NASDAQ:ZRAN - news) , which also supplies DVD makers with embedded chips for operation, trades at 145 times trailing earnings. Sure, C-Cube may be growing its company slower than Zoran's, but the company is about three to four times the size of Zoran, plus has its hands in a lot of technological areas. In fact, C-Cube would look even more attractive if Motorola (NYSE:MOT - news) and General Instrument (NYSE:GIC - news) do in fact merge, since Motorola wants to push its chips into the digital market. In fact, C-Cube would be an attractive acquisition target for any set-top player looking to nab a chipmaker with excellent technology, deals and a great balance sheet. Indeed, back in June C-Cube's shares jumped 12% in one day on buyout rumors. Takeover speculation aside, C-Cube could wind up being a $48 stock if it can earn $1.60 a share next year. If so, C-Cube would only need to garner a multiple of 30 times that estimate, which should not be too hard within the next 12-months, as the stock trades at those levels today, using trailing figures. Bottom Line: C-Cube has several good technologies and deals to back up its products. The company carries a good, solid balance sheet, and could experience some decent earnings momentum later this year if DVD players become a popular holiday gift, as many analysts are anticipating.