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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Killian who wrote (105633)	7/5/2000 11:38:07 AM
From: Molly Mayhem	Read Replies (1) \| Respond to of 120523

Shekinah, Thanks! When you mentioned KEM this morning I jumped aboard. My husband designs switches for the automotive industry and he has been having a tough time getting capacitors anywhere. He must place an order 3-6 months in advance. That fact alone makes me very bullish on KEM. Thanks for bringing it to my attention. Molly

To: Killian who wrote (105633)	7/5/2000 11:41:39 AM
From: Rick C.	Respond to of 120523

<KEM impressive co.> Plus, where else does ownership of three cos. control the entire sector?! VSH,KEM,AVX

To: Killian who wrote (105633)	7/5/2000 1:35:56 PM
From: Luce Wildebeest	Respond to of 120523

ALSC looks good at this level as well. niv Prudential Research (Strong Buy)"We rate ALSC a STRONG BUY for the following reasons: * We believe that Alliance is well positioned to take advantage of theincreasing levels of product demand in the SRAM, DRAM, and flash memory chipmarkets. While competitors are facing production crunches from the intensedemand for chips, ALSC has ample production capacity thanks to its equityventures in two fabrication facilities (United Microelectronics and CharteredSemiconductor). These investments provide them with the ability to supportproduction for a $600 to $800 million company. * Alliance has made great strides to improve both its visibility in themarketplace and its marketing/sales strategies. They are currently enjoyingthe strongest backlog levels in their history which could lead to potentialupside in top line, gross margin, and operating expense lines. ALSC has alsomade shifts in its marketing approach to help boost production. * Alliance also maintains a substantial private and public equity portfoliocontaining some of the strongest players in the semiconductor industry. Theirholdings include 340 million shares of UMC, 2.14 million shares of CharteredSemiconductor (CHRT), 488,000 shares of Broadcom (BRCM), and 852,000 shares ofVTSS Semiconductor. This collection carries a market cap (as of 5/16/00) ofapproximately $1.2 billion. ALSC also has roughly $130 million tied up inprivate equity holdings through its venture capital division. We feel thatthese holdings are underestimated in the valuation of ALSC's share price(current market cap of $830 million), and could lead to a significant upside onits appraisal. * ALSC's connections with UMC and CHRT appear to be paying off already. Thecompany still has ample production capacity at UMC and Chartered, so whiledemand for Alliance SRAMs and DRAMs continues to accelerate, most competitorsare already sold out. This in turn has allowed ALSC to raise prices for theirproducts 10% in the September quarter and up their book-to-bill ratio to over2.0. * Our valuation of ALSC is based on a sum-of-the-parts analysis. The combinedpublic holdings can be valued at approximately $21 per share (applying a 25%discount to $1.2 billion for lock-ups and volatility). The value of theprivate holdings comes to approximately $3.00/share (applying a 35% discount to$130 million value for illiquidity). To account for Alliance's operations, weare applying a 23 times multiple to our 2001 calendar earnings per shareestimate of $0.62, which is a significant discount to other memory companiestrading on average around 29 times calendar 2001 estimates, and gets us to$14.00. Adding the sum-of-the-parts, ($21+ $3+ $14) results in our target.