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

To: John Farrell who wrote (3511)	5/25/2000 6:57:00 AM
From: Trader Dave	Read Replies (1) \| Respond to of 3818

Is it that hard to predict using a 3 to 5 year time frame versus a 6 month time frame? I actually think using the longer term outlook is easier if you can look under the covers at industry trends and sector dynamics. Over the next 6 months, if market conditions are ugly, is it possible that PMCS will 1/2 of current levels? Sure why not? Don't ask me what's gonna happen near term. Is it possible to answer a few questions though? How fast will the market grow for the segments pmcs sells into over the next 3 to 5 years? How long and sustainable are pmcs' design wins? If current revenue is being driven by 1997 and prior design wins (and a little of 1998), When will 1998 and 1999 design wins start to drive growth? What is the correlation ratio between design win growth rate and market growth? PMCS will certainly face some major challenges over the next several years, but the massive R&D spending and management's past ability to anticipate new opportunities via tight relationships with its customers (and new startups) lets me sleep at night. However, I completely agree that the speculative excess got so high so quickly that there is significant downside risk from here. Every rally feels like a selling opportunity. Generally a stock should ONLY appreciate in line with it's revenue and earnings growth. With triple digit pe ratios on forward earnings, I think people should expect multiple compression as they hold these types of stocks, especially in a rising rate environment. TD