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Technology Stocks : Vitesse Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: A. Edwards who wrote (3502)	6/8/2000 8:47:00 AM
From: lazarre	Read Replies (1) \| Respond to of 4710

Ocassionally you find worthwhile material on Yahoo: <<With credit to Azad94087 Semiconductor (NASDAQ: VTSS) and Anadigics (NASDAQ: ANAD), have come to dominate the fast-growing niche. Hans Mosesmann, an analyst with Prudential Securities, figures that the usage of GaAs chips will rise sharply from current levels. In 1999, the typical wireless phone used $2 worth of GaAs components. That figure should soon rise to $7 or $8. Cable TV set-top boxes are another driver. Old style analog boxes used $2 worth of GaAs chips per unit. But the newer digital models "could increase to $5 and potentially up to $10 by 2002. Over the last 12 months, each outfit has boosted sales and per share profits more than 50%. And analysts expect that growth to keep up over the next few years as well. In the current fiscal year, each company is expected to boost profits at least 60%, while 2001 should see an additional 35-50% in profits. The recent tech sell-off was especially brutal for the pair of GaAs chip makers. Vitesse saw its shares fall 50% from peak to trough, while Anadigics fell an eye-popping 74%. Though the stocks rebounded last week, they're still well below their all-time highs. Like many tech stocks, it's hard to call either stock a bargain based on current earnings. Both trade for more than 40 times projected 2001 profits. But on a price/sales basis, which is a more meaningful metric, each stock sells for half the multiple it once garnered. Moreover, competitors such as PMC/Sierra (NASDAQ: PMCS) and Broadcom (NASDAQ: BRCM) are much more expensive. PMC/Sierra sports a price-to-sales multiple of 87, and Broadcom's price-to-sales multiple is 57. Of the two, Anadigics would look like the relative bargain as it trades for only nine times sales, compared to a multiple of 30 times sales for Vitesse. Vitesse, on the other hand, has made a series of key product introductions and acquisitions that should help it to snag even more contracts in the quarters to come, indicating higher growth rates. Either way, this is a great time to pick up shares of these next generation chip developers. Stocks for the Next Correction >> The above sharpens the focuss on ANAD and VTSS as "value plays" :-) in this comm. chip niche. L