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 : Alliance Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (7412)	5/2/2000 11:11:00 AM
From: John McDonald	Read Replies (1) \| Respond to of 9582

I don't think Fountaine was at the CC. Could he have possibly missed something??

To: Madharry who wrote (7412)	5/2/2000 11:30:00 AM
From: Czechsinthemail	Read Replies (1) \| Respond to of 9582

What was strange about LaFontaine's recommendation was that he upped it to Strong Buy while reducing the earnings estimate based on an expectation of lower investment income going forward. I think he is keeping his expectations very modest and will likely upgrade the earnings estimates reiterate the Strong Buy and raise the target price down the road. I continue to be amazed at how the market evaluates ALSC. You could argue that the stock price is reflecting a discounted investment in UMC, Broadcom, Chartered Semi and Vitesse while ignoring the venture activities and the core semi business. As for the ventures, I'm not sure what kind of cash flow they have. My guess is that their perceived value goes up and down with changing sentiments about the market and the expected potential for IPO's. The big question now is what the company will decide to do with its cash hoard -- acquisitions? more aggressive venture programs? spinoffs? or perhaps taking the company private? Reddy has seemed very sharp so far in finding ways to increase shareholder equity and eventually the market price will reflect that value.

To: Madharry who wrote (7412)	5/2/2000 12:43:00 PM
From: Doug Simpson	Read Replies (1) \| Respond to of 9582

The following is a previous post from LaFountain, but maybe he could respond to any questions, I believes he still posts. To: Ken Jordan who wrote (5185) From: A. A. LaFountain III Tuesday, Jun 29, 1999 10:52 AM ET Reply # of 7416 Ken: re "DayGrading" Nice word play. Now about my shifts in ratings...as I have explained on some other threads on SI, my ratings are solely driven by the relationship of the stock price to my 12-month target. That "target" is a projected value that I generally derive from the EPS growth rate. However, in the case of ALSC, I am using a methodology based on the asset valuation (and it's probably a conservative valuation, but I can live with that). In any event, when there is 35% or more potential gain to my target, the stock merits a Strong Buy. Should the potential gain decline to less than 20% (either due to share price appreciation or an adjustment to the "target"), I lower the stock to a Buy. In this particular instance, I had lowered my rating to a Buy last week when the stock was up over $10 and my target was only slightly higher. I have decided that the probability factor for the closure of the UMC deal was too low, and have moved it up from 2/3 to 85% (this is fairly arbitrary, but so be it), which more than offsets the decline in UMC stock price from where the target was calculated last week. With the stock off 10%, the spread between the now lower stock price and the now higher target ($12.50) was enough to justify the rating change. There are times when the relatively small percentage point change between a 35% potential gain and a 20% potential gain can make this process seem a little screwy (particularly when dealing with a low-priced stock). However, it is consistent...and I feel that a disciplined approach is inherently better than willy-nilly. - Tad LaFountain