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Strategies & Market Trends : Angels of Alchemy -- Ignore unavailable to you. Want to Upgrade?

To: HandsOn who wrote (14242)	9/26/2000 9:23:29 PM
From: puborectalis	Respond to of 24256

NSM comments recently...... TFN First Call September 25, 2000 National Semiconductor (NSM) Price: $41.75 Buy September 25, 2000 (FYE Month) F00 F01 F02 Curr. Last Yr. Ago Revenue ($M) EPS* Old Revenue 2139 2788.8 3435.0 688 640 513.9 Old EPS* 1.57 3.17 3.28 0.80 0.76 0.37 *FY 00, 01 and 02 tax rates are 4.2%, 20.0% and 30.0% respectively. Reported results exclude $6.4 million of one time charges and exclude $20.5 million of one time gains and $20.5 million of offsetting charges reported in SG&A. On Friday we attended National Semiconductor's combined annual and analyst meeting. While lightly attended from the sell side due to Intel's pre-release the night before, this meeting confirmed the business conditions seen at the time of National's report in early September. Responding to the heightened concern raised by Intel, in both formal remarks and off-line comments National suggested that demand from Europe for them is good and tracking to expectations. In fiscal 2000, Europe accounted for about 25% of National's revenues. National highlights that in PC's their exposure is more levered to notebooks and servers - consistent with PC OEM's doing okay vs. white-box vendors. White-box companies are much more levered to desktops than notebooks or servers. On Friday, National also announced an 8 million share buy-back being put in place primarily to offset employee options. At $42 National trades at 15.1 x our C01 estimates of $2.77 (taxed at 30%), a significant discount to pure play analog competitors. While we believe that National should trade at a discount to the likes of Linear Technology or Maxim Integrated, at current levels we believe the shares are attractive and reiterate our buy. Our price target is unchanged at $93. National's presentation focused on the bred and depth of its analog business. Analog accounted for about 71% of overall revenues in F00. As importantly, National's analog business is now comprised of 83% proprietary product. The increasing percentage of proprietary products use allowing the company to drive its mix to include a higher percentage of higher gross margin products. While the company still is exposed to some older multi source, lower margin analog devices, these are rapidly becoming a minority. From a margin model perspective, National emphasized its long-term margin model. From current levels, National's expectations are to see an additional point or two of gross margin expansion and a bit more on the operating margin line. These margin increases should both come as a result of in improved mix as well as from increasing utilization. Our gross margin assumptions are tracking in line with the company's, while our operating margin assumptions are at the lower end of the company's expectations driven by a slightly higher R&D expense assumptions. National reviewed its exposure to wireless, noting the increasing dollar per phone opportunity that it sees. While National's unit assumptions are tracking current industry forecasts, the company emphasized its increasing dollar per phone opportunity. Specifically, the company cited current cell phone opportunities that include only a couple of dollars of National's products compared to the goal of moving towards close to $20.00 of National's components per cell phone. This transition will be driven by a move from just supplying discrete analog devices including low drop out regulators, phase lock loops and audio amplifiers, to phones that include National's complete radio ship set. This chip set should begin shipping in calendar 01. In addition, National highlighted the opportunities it sees in 3G and in digital cordless. From a PC demand perspective, National would argue that its view of the market is becoming more limited as its exposure to this segment continues to decline post the sale of its Cyrix business. National's current exposure is driven by its super I/O products that continue to sell to a variety of PC applications as well as some analog devices that sell into the PC space. National's exposure to PC's is increasingly focused on mobile and server applications. In addition, National's devices are tending to sell more to tier-one PC OEMs with much of the traditional white-box business having transition to local Taiwanese chip set manufacturers for Super I/O equivalents. While this certainly colors National's view of being one more focused on notebooks, servers and tier-one P C OEMs, National believes that demand from these segments continues to be good. Consistent with our observations on Intel, we believe that Intel's shortfall versus expectations was in part impacted by incremental weakness seen by un-branded white-box vendors versus relative strength seen by tier-one OEMs. We believe this continues to be a key element in reconciling the strength noted by a number of PC OEMs in Europe versus Intel's observation of relative weakness from this geography. Recall that National entered its November ending quarter would strong momentum from its PC customers. National's discussion of its information appliance strategy reiterated the large number of ongoing designs. For National's Geode product (its highly integrated single chip processor), National notes that over 120 design wins are currently in process. While many of these designs will undoubtedly not make it to high volume production, there clearly is a lot of interest and experimentation among National's customer base. We continue to believe that a number of these information appliances represent experimentation more along the lines of packaging and form factor experimentation than in market changing innovations. Having said this, we believe that a number will make a too high volume production and could drive incremental revenue growth for the company. The timing and success of these design wins converting to high volume production continues to represent perhaps the greatest area of possible revenue upside over the next several years. From Before: Bookings increased slightly Q-Q, which for National's August ending quarter is better than the typical decline in bookings normally seen. The growth in bookings was driven in part by a strong bookings momentum for PC components as the Company exited the quarter. Going forward, the company's guidance calls for an additional 6 to 8% increase in revenues, similar to the guidance given for the August quarter. National indicates that backlog levels currently in place should allow it to reach revenue targets with only normal turns business required (in the mid 20% range). Our estimate increases reflect slightly higher revenue assumptions, higher gross margin assumptions and slightly lower operating expenses. For the November quarter, we have included $10 million of anticipated other income. For quarters beyond November, we are modeling zero contribution from other income, but believe this continues to be a source of possible upside. Commentary on wireless was as expected- National has seen some share shifts but believe market is tracking to the 420-430 million level this year and something north of 600 million next year. Wireless in total (handsets/base stations, catalog and wireless specific accounts for about 25% of National's revenues. National sells to a wide variety of wireless customers including Ericsson (the Company's largest customer), Nokia, Motorola, Samsung and Seimens. Of these customers, we believe that the Company saw the expected forecast reductions from Samsung and Motorola, while Ericcson and Nokia continue to track expectations. Demand trends from PC customers seen in August and into September showed a marked pick-up in orders . After seeing the expected seasonal weakness in July, we believe that demand is somewhat better than seasonal expectations alone would suggest. Similar to the comments that we reflected yesterday, component suppliers have seen both continued optimism demonstrated by tier one PC OEMs including a good start to business in September. National continues to see a strong number of design wins on information appliances. From a revenue perspective, IA's accounted for about 10% of revenues slightly lower than last quarters 11% level. National's current solutions targeted at this market are proving attractive to a wide variety of platforms. While the number of design wins continues to grow, many of the platforms represent brand new categories with, we believe, many unlikely to reach volume success. Our net: Although National's quarter was in line from a revenue perspective, the 8% growth seen was stronger than what would normally be expected for an August ending quarter. With a slight increase in bookings quarter over quarter, better than the normal decline seen in the August quarter, we believe that company revenue guidance of 6 to 8% could be conservative. National is clearly benefiting from a strong analog environment as are competitors including Linear Technology, Maxim Integrated, Texas Instruments and Analog Devices. National's commentary supports our view that demand from PC vendors picked up nicely through August and into September. In information appliances, the company is seeing a large number of design wins, but these wins have yet to translate to significant revenues, and Q-Q actually grew at a slower rate than the company's overall revenues. As we move into C01, we expect some a small number of these wins to migrate into high volume production while a more significant number will likely flounder. Rather than being a criticism of what National has achieved (in terms of the number of design wins). We believe many of these platforms represent experiments in packaging and form factors and like many of the early limited function internet access schemes may not find wide spread adoption when more capable, fully functional PC's are available well below the $1000 level already. Longer term, we worry that the successful "informational appliances" that emerge will need to track the performance increases seen in the PC industry (maintaining their relative performance while absolute performance will trail). With National having more limited processor core design expertise (post the sale of its CYRIX business and the loss of processor design talent), we continue to believe this is risk going forward. From Before: While we have continued to suggest that we are less bullish than some concerning National's involvement in the IA segment, we are increasingly impressed by the number of companies developing a range of products . While we still believe that caution is warranted relative to both the timing and size of revenue contribution, the unit opportunity may at some point be greater than we have been anticipating. We still believe that many of the information appliances will be sold largely on a combination of ease of use as well as on aggressive price points. Consequently, we believe margin contribution to suppliers selling into these devices could be challenging, and could serve to cap National's GM contribution even as this segment adds to bottom line earnings.

To: HandsOn who wrote (14242)	9/26/2000 9:28:12 PM
From: Frederick Langford	Read Replies (4) \| Respond to of 24256

CEG had a heck of a day. Looking for 50 on this energy stock. I like ENER as well ECD'S President and CEO Keynote Speaker At Fuel Cell 2000 Conference TROY, Mich., Sept. 22 /PRNewswire/ -- Energy Conversion Devices, Inc. (ECD) (Nasdaq: ENER) is pleased to announce that Stanford R. Ovshinsky, president and chief executive officer of ECD, will be a keynote speaker, on Sept. 27th, at the "Fuel Cell 2000 Research and Development," a conference to be held by Strategic Research Institute's Natural & Developed Resources Division. The conference, sponsored by the U.S. Department of Energy, is being held at the Crowne Plaza Hotel in Philadelphia on Sept. 26-27, 2000. Stan Ovshinsky is a recent recipient of the Sir William Grove award from the International Association for Hydrogen Energy and last month he and Dr. Iris Ovshinsky, cofounder of ECD, were named Heroes of Chemistry by the American Chemical Society for "advances in electrochemical, energy storage, and energy generation, including the development of Ovonic nickel metal hydride (NiMH) rechargeable batteries, fuel cells, solid hydrogen storage systems and amorphous silicon photovoltaics." The Heroes of Chemistry award this year honored "chemical innovators whose industrial work in chemistry or chemical engineering has made significant and lasting contributions to global human welfare." Last year, Stan Ovshinsky received the Karl Boer Solar Energy Award of the International Society for Solar Energy. Stan Ovshinsky will discuss the hydrogen economy as a complete system and the role the fuel cell will play in it. On Sept. 21, ECD and Texaco announced the formation of a joint venture, Texaco Ovonic Fuel Cell Company, L.L.C., to further develop and commercialize ECD's Ovonic Regenerative Fuel Cell(TM), and are working together to establish other joint ventures related to ECD's advanced energy technologies, including the Ovonic Solid State Hydrogen Storage System(TM). ECD is a leader in the synthesis of new materials and the development of advanced production technology and innovative products. It has pioneered and developed enabling technologies leading to new products and production processes based on amorphous, disordered and related materials, with emphasis on energy and information. ECD's energy work includes photovoltaics, fuel cells, hydride batteries and hydride storage materials capable of storing hydrogen in a solid state for use as a feed stock for fuel cells or internal combustion engines or as an enhancement or replacement for any type of hydrocarbon fuel. In information, ECD has originated phase-change memories and Ovonic threshold switches as well as advanced Ovonyx unified memories. ECD's web site address is ovonic.com . This release may contain forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on assumptions which ECD, as of the date of this release, believes to be reasonable and appropriate. ECD cautions, however, that the actual facts and conditions that may exist in the future could vary materially from the assumed facts and conditions upon which such forward-looking statements are based. For more information on Fuel Cell 2000 conference: www.srinstitute.com/cr173 . SOURCE Energy Conversion Devices, Inc.ECD'S President and CEO Keynote Speaker At Fuel Cell 2000 Conference TROY, Mich., Sept. 22 /PRNewswire/ -- Energy Conversion Devices, Inc. (ECD) (Nasdaq: ENER) is pleased to announce that Stanford R. Ovshinsky, president and chief executive officer of ECD, will be a keynote speaker, on Sept. 27th, at the "Fuel Cell 2000 Research and Development," a conference to be held by Strategic Research Institute's Natural & Developed Resources Division. The conference, sponsored by the U.S. Department of Energy, is being held at the Crowne Plaza Hotel in Philadelphia on Sept. 26-27, 2000. Stan Ovshinsky is a recent recipient of the Sir William Grove award from the International Association for Hydrogen Energy and last month he and Dr. Iris Ovshinsky, cofounder of ECD, were named Heroes of Chemistry by the American Chemical Society for "advances in electrochemical, energy storage, and energy generation, including the development of Ovonic nickel metal hydride (NiMH) rechargeable batteries, fuel cells, solid hydrogen storage systems and amorphous silicon photovoltaics." The Heroes of Chemistry award this year honored "chemical innovators whose industrial work in chemistry or chemical engineering has made significant and lasting contributions to global human welfare." Last year, Stan Ovshinsky received the Karl Boer Solar Energy Award of the International Society for Solar Energy. Stan Ovshinsky will discuss the hydrogen economy as a complete system and the role the fuel cell will play in it. On Sept. 21, ECD and Texaco announced the formation of a joint venture, Texaco Ovonic Fuel Cell Company, L.L.C., to further develop and commercialize ECD's Ovonic Regenerative Fuel Cell(TM), and are working together to establish other joint ventures related to ECD's advanced energy technologies, including the Ovonic Solid State Hydrogen Storage System(TM). ECD is a leader in the synthesis of new materials and the development of advanced production technology and innovative products. It has pioneered and developed enabling technologies leading to new products and production processes based on amorphous, disordered and related materials, with emphasis on energy and information. ECD's energy work includes photovoltaics, fuel cells, hydride batteries and hydride storage materials capable of storing hydrogen in a solid state for use as a feed stock for fuel cells or internal combustion engines or as an enhancement or replacement for any type of hydrocarbon fuel. In information, ECD has originated phase-change memories and Ovonic threshold switches as well as advanced Ovonyx unified memories. ECD's web site address is ovonic.com . This release may contain forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on assumptions which ECD, as of the date of this release, believes to be reasonable and appropriate. ECD cautions, however, that the actual facts and conditions that may exist in the future could vary materially from the assumed facts and conditions upon which such forward-looking statements are based. For more information on Fuel Cell 2000 conference: www.srinstitute.com/cr173 . SOURCE Energy Conversion Devices, Inc. Fred