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Technology Stocks : PMC-Sierra (PMCS) -- Ignore unavailable to you. Want to Upgrade?

To: John Farrell who wrote (3397)	4/14/2000 1:53:00 PM
From: Trader Dave	Respond to of 3818

While I fondly remember the 1998 buying opportunities caused by Clark Westmont's claims of summer seasonality and nicholas applegate dumping due to the planned increase in R&D expenditure, there is a MAJOR difference between then and now. PMCS declined to a PE ratio of well under 30 times published 1999 estimates. PMCS has declined to around 122 times 2001 published estimates. (Yes, I am well aware of the conservative nature of those estimates, but they won't by off by factors of 2 or more.) There is a dangerous element to the market comparing the relative declines in the market given the spectacular increases in valuation we've seen in the last several years. TD

To: John Farrell who wrote (3397)	4/14/2000 2:17:00 PM
From: SJS	Read Replies (1) \| Respond to of 3818

CSFB review the PMCS quarter report __________________________________ PMC-Sierra (PMCS-$125 6/16-$21 B-Strong Buy) ?Unusually Robust Business?: PMCS Beat our 1Q Estimate AND our 2Q Estimate! CY00E: $0.78; CY01E: $1.17 (formerly $0.75/$1.10) ú PMCS posted an incredible 28% sequential growth for 1Q00 to $103 MM, with gross margin hitting 80%. That said, while PMCS reported $0.17 on a pro forma basis (beating consensus of $0.16), results would have been $0.21 without the higher R&D and share count effects from the recent AANetcom and Toucan acquisitions. ú PMCS increased its engineering pool through internal recruiting and recent acquisitions: Extreme Packet Devices, AANetcom and Toucan (179 employees joined PMCS, with roughly 100 from recruiting). This design talent boosts product development and signals the seeds for future revenue growth and higher value products. ú Both the number of socket design wins and the dollar content per system continues to increase significantly and reflects PMCS's strategy of providing architectural solutions is rewarded with multiple wins. ú We reiterate our Strong Buy, increasing 2000 estimates to $0.78 (revenue of $500 mm) and 2001 EPS to $1.17 ($760 mm in revenue). Our price target remains at $250, but plenty of upside remains.

To: John Farrell who wrote (3397)	4/15/2000 9:53:00 AM
From: hospitalman	Respond to of 3818

John Thank you for that reasoned analysis. It is a breath of fresh air in the midst of this insanity. Your WAG about the future is conservative as we all know. The conference call noted that all of this quarter's earnings were from PMC, not the 2 most recent acquisitions, yet earnings were held down by their expense. Yes, valuations are high, they always are for companies like this. But as interest rates rise, this most recent Old Economy move is going to turn into a dry gulch, and the solid New Economy stocks with products/profits/cash flow/growth are going to look like the oasis again. Ken