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.

Strategies & Market Trends : 50% Gains Investing -- Ignore unavailable to you. Want to Upgrade?

To: B Tate who wrote (18017)	5/6/2000 2:28:00 AM
From: Dale Baker	Respond to of 118717

Thanks for the great DD, BT. I never dug into ALSC deeply enough to see that angle; but semi companies tend to confuse me anyway so it's easier to buy the names I know when the business cycle is good. I didn't trade much at all Friday. Shorted GSTRF in the mid-10's and have to decide now how long to hold.

To: B Tate who wrote (18017)	5/6/2000 7:54:00 AM
From: JSB	Read Replies (1) \| Respond to of 118717

BT, if I am not mistaken, ALSC owns 50% of UMC. They also own some VTSS as I recall. What attracted me to the stock was the fact that their core business seems to have turned around and generated .05 earnings this quarter. If the cash and investments were factored out, the core business which is growing finally, is dirt cheap. My guess is that with 50% ownership of UMC, they don't need their own fab since UMC serves that purpose.

To: B Tate who wrote (18017)	5/6/2000 8:03:00 AM
From: JSB	Respond to of 118717

Last ALSC post. <gg> Read posts 7442 and 7444 on the SI ALSC thread. They show the ALSC puplic holdings and fully diluted value of 35 bucks per ALSC share. They do not include an additional 18 private holdings.

To: B Tate who wrote (18017)	5/6/2000 9:07:00 AM
From: tdl4138	Read Replies (3) \| Respond to of 118717

Btate, As to ALSC failing in their core business...did you notice the 108% increase in revenue? And that they had gone from an operating loss to a net gain? Also, the last earnings statement mentioned new products that were already ramped up...and a record backlog? The interesting part of ALSC's story is also do in part to their investments...and the last qtr's "incidental income" should continue in the future. On another note...you specifically asked for a solid pure natural gas play. Ok....got one. Take a look at THX...Houston Exploration. Still relatively cheap to its peers...revenue's last qtr were only up 84%....and the net upticked slightly to 8.4m from 746k....Should the NG crunch continue...this one will see the 30's before the end of year. If you see the same thing here that I do....I would suggest you also look at the Sept 17 1/2 calls....they are a gift. Just my opinion....

To: B Tate who wrote (18017)	5/6/2000 6:48:00 PM
From: Czechsinthemail	Read Replies (3) \| Respond to of 118717

B Tate, I noticed several posts have already responded to your comments on ALSC. The main problem in trying to analyze the company is that it looks very different if your emphasis is on looking backward rather than looking forward. Before making a summary judgment on their SRAM/DRAM business, it is helpful to understand where they are in a semiconductor cycle. There are times of shortage when chipmakers make money hand over fist. And there are times of gluts when prices decline and chipmakers bleed profusely. We have been going through several years of glut, during which virtually all DRAM companies have looked awful. They have been losing money, many have abandoned the business, and few have made substantial investment in new plant and equipment. But the demand for semiconductors has continued to grow. The general assessment now is that we are coming into a time in which demand catches up with and begins to outpace supply. The potential for a semiconductor boom has been why both semiconductor and semi equipment companies have been such strong performers (at least in relative terms) lately. Semiconductor companies are trying to increase production to be able to meet higher demand. However, there is a substantial time lag in bringing new semiconductor fabs and equipment upgrades into production. Current projections are for a substantial increase in semiconductor sales with shortages appearing in 2H00. ALSC's core semi business is currently profitable with a substantial backlog through the end of this year. Management's guidance was for 20%+ sequential quarterly growth in revenues. Since semi companies operate with relatively large fixed costs, that increase in sales is likely to improve margins and contribute to significantly larger gains in earnings. Another important consideration is that Alliance has significant ownership interests and production allocation rights at UMC and Chartered Semiconductor. With more companies going fabless and contracting their production through semiconductor foundries like UMC, TSMC and Chartered Semiconductor, these foundry companies have become increasingly important in total global semiconductor production. They have been making enormous capital investment in state of the art production facilities that increase both their capacity and their efficiency. Meanwhile, they are showing rapidly growing sales, backlogs and profits. Beyond the value of investments in rapidly growing companies, ALSC's production allocation rights can be extremely valuable, particularly in a tightening supply situation, because they allow ALSC to increase production without further capital investment. ALSC's substantial investments in quality semi companies like UMC, CHRT, BRCM and VTSS, currently worth about twice ALSC's market cap and growing like weeds, have made it tempting to evaluate ALSC simply as an undervalued holding company selling below its $22.36 book value and way below its net liquidation value. The strength of this kind of analysis is that it is easily quantifiable. The weakness is that it ignores the dynamic growth potential. First, it ignores the growth in the investments themselves. It also ignores ALSC's now profitable and growing core semi business and their venture program -- a valuable long-term incubator program that is hard to quantify in current dollars. Beyond giving them valuable seeds that can provide profitable growth through IPO's, the venture program provides a way of developing new technology on the cheap through ownership interests in a diverse R&D network of small companies. As a combination value/growth situation, ALSC is one of the most attractive companies around. If you want more up-to-date information on Alliance, I suggest checking out their most recent earnings report and listening to the webcast of their most recent conference call. The webcast, in particular, will give you a clearer sense of where they are now. Most recent earnings report: alsc.com Webcast available here: alsc.com You can also check out the SI ALSC website: Subject 537