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Technology Stocks : Semtech (Nasdaq:SMTC) -- Ignore unavailable to you. Want to Upgrade?

To: A. Wayne who wrote (1000)	1/22/2000 9:56:00 AM
From: Leeza Rodriguez	Read Replies (1) \| Respond to of 1225

Monday IBD has two write-ups that mention SMTC. Red Oak Technology taskmaster mentions SMTC as one of two 'favorites' (along with Maxim). Then, there is a group write up on the Chipmakers with an accompanying spreadsheet of the financial parameters. The chart is actually pretty helpful except that the last column where they break out the 'pretax margins' is highly suspect. Unless I have been unbeknowingly living a confused financial life, I see a few errors in this column. In my book 'pre-tax margin' = operating margin. I personally think that whoever prepared this chart got confoozled with gross margins , operating margins, and net margins. (?). Can anybody else validate this finding? First of all SMTC pre-tax margins (operating) for the last quarter were 26%. Just fire up your solar calculator and take the operating income and divide it thru by the gross sales.Voila, pre-tax = 26%. The number they have displayed there (16.9 %) is more like the NET margins. Shall we shoot the journalist? Then, let's move down to Linear Technology....OPERATING margins of 56.4% ??? That sounds totally suspicious to me. The only companies that get those kind of operating margins are the MSFT's , software companies , no gravity e-commerce marketplaces like EBAY, or web sites selling sex and drugs. In any event, what makes me feel REALLY GOOD about SMTC is if you calculate the PSR ratios (market cap/ revenues) of the the top 3 that have operating margins of 25%-30%, you can calculate that they are trading at PSR's of 36-62 (which IS totally obnoxious), while our baby SMTC trades with a modest (in this day and age) PSR of 13 , with a current OPERATING MARGIN of 26%. It's just too bad they didn't publish accurate numbers so it would be more obvious. STAY LONG. Leeza Rodriguez