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 : Bosco & Crossy's stock picks,talk area -- Ignore unavailable to you. Want to Upgrade?

To: Crossy who wrote (3157)	4/11/2002 5:59:00 PM
From: Crossy	Respond to of 37387

On today's market.. Today's market closed down more than 2% on a rumor that IBM might be the subject of a SEC investigation into its accounting. However after hours the public learnt that the SEC has already closed this investigation. So the market tanked "in vain.". I regard the current market mood "desparation" as absurd. To me, today is a perfect example of my shaking out the weak crowd scenario. The market tanked on a total CRAP of news. A rumor of a phony "SEC" insight newsletter. Hey even you or me could start such an outfit puring crap all over. But this kind of double-cross is exactly what those timid "investors" deserve IMHO. This shakes confidence in the market up to the point where there is no hold-back and finally the market will not have any bounds to its movements. IF this goes on (and this mood looks pretty engineered to me) then this is the opposite of the bull trap in MArch/Sumemr 2000 to me.. It looks as if a bear trap is being opened. Today's volume was average whille the VIX had another spike... So the whole market tanked because of a false rumor on ONE company. Absolutely nuts. Unbelieveable. The "accounting" watch taking its toll and taking its mission to absurd extremes. Maybe the next leg up would be to literally blame and punish those "messengers" with new type of editor/disclosure rules.. Nothing would surprise me now.. The whole situation is totally ridicolous to me. If you look outside you have signs of recovery painted all over the place. All data support this. Consumer spending is up nicely. Inventory is removed from the warehouses. Invesntory stocks are near an all time low. Companies however tend to be rather sceptical. Not directly "plowing" thru new orders but trying to stretch them out as far as they can. It seems they don't believe in the current climate. The last time we had this over-cautious bizownes was in the early 90ies. And while consumers are spending like hell, business are more shy. But the market is absolutely self-centered in its pain "exercise" and literally using any excuse to correct. How long will this absurd sensitivity go on ? I don't know. One thing is sure. Main street beats the tune. The market can't refuse to dance forever.. rgrds CROSSY

To: Crossy who wrote (3157)	4/11/2002 7:35:32 PM
From: Crossy	Read Replies (2) \| Respond to of 37387

re: New Pick - MLTC $ NasdaqNM: 1.95 (Multilink Technologies) Description: Multilink Technology Corp. (Multilink) designs, develops and markets advanced integrated circuits, modules and higher-level assemblies that enable next generation optical networking systems. The Company's products address the markets for DWDM and SONET/SDH optical transport equipment. Multilink focuses exclusively on the fastest commercially available speeds of OC-192, or 10 gigabits, or billions of bits per second, or higher and are in the early stages of developing products designed to address future systems that may operate at speeds of OC-768, or 40 gigabits per second. The Company seeks to be first to develop components that allow communications equipment manufactures to rapidly build and deliver high performance fiber optic systems more quickly and with more functionality and greater performance than their competitors. Historically, a relatively small number of customers have accounted for a majority of the Company's revenues. The Company's three largest customers accounted for approximately 73% of its revenues for the six months ended June 30, 2001, 73% of its revenues in 2000 and 74% of its revenues in 1999. The Company's top three customers for the six months ended June 30, 2001 were Alcatel, TyCom and Marconi, representing approximately 39%, 23% and 11% of the Company's revenues, respectively. The Company's top three customers in 2000 were Lucent, Alcatel and Cisco, representing approximately 34%, 28% and 11% of its revenues, respectively. The Company's top three customers in 1999 were Lucent, Alcatel and TyCom, representing approximately 36%, 20% and 18% of its revenues, respectively. The Company competes primarily against Agere, Applied Micro Circuits, Conexant, Giga (acquired by Intel), Infineon, JDS Uniphase, Maxim, Nortel (microelectronics division), NTT Electronics, Philips, PMC-Sierra and Vitesse. Notable: Company obtained a very advanced SiGe (Silicon Germanium) process in a codevelopment effort with IBM and recently conducted a similar agreement on InP with a German Upstart. Financial Data Price & Performance 52-Week Low on 1-Mar-2002 $1.88 Recent Price $1.95 52-Week High on 8-Aug-2001 $18.40 Daily Volume (3-month avg) 281.9K Daily Volume (10-day avg) 100.0K Performance relative to S&P500 -68.0% Share-Related Items Market Capitalization $146.6M Shares Outstanding 75.2M Float 20.3M Per-Share Data Book Value (mrq) $2.15 Earnings (ttm) -$0.28 Earnings (mrq) -$0.12 Sales (ttm) $2.32 Cash (mrq) $1.31 Valuation Ratios Price/Book (mrq) 0.91 Price/Earnings N/A Price/Sales (ttm) 0.84 Income Statements Sales (ttm) $130.5M EBITDA (ttm) -$12.9M Income available to common (ttm) -$12.4M Financial Strength Current Ratio (mrq) 3.97 Debt/Equity (mrq) 0.03 Total Cash (mrq) $92.7M Short Interest as of 8-Mar-2002 Shares Short 386.0K Percent of Float 1.9% Shares Short (Prior Month) 631.0K Short Ratio 0.74 Daily Volume 521.0K My take: This valuation is insane and under book. Optoelectronic whiz-kid shop MLTC on sale for PSR of 0.90. What a steal. Like a close out.. Many posters on the Yahoo board have been hammering the ULH/LH theme for MLTC. That should be more indicative of the past then the present. I noticed their most recent quarterly PR. They describe OC192 products for METRO AND Long Haul.. 2) Now "specialization" on the wrong niche was cited for MLTC indirectly implying MLTC "bet on the wrong horse". First of all the only viable market in the PAST for OC-192 (!) was long haul and ultra long haul particualrly submarine chips had extra premium (due to the even longer spans required). However you should see that MLTC uses SiGe for it 10Gbit chipsets (OC-192). That should be way cheaper to produce than InP or GaAs designs plus the fact that yield should be higher. I have all enough reasons to assume MLTC could sell to metrocore /normal long haul system designers at competitive pricing also and still making good prodits, just because they have an edge with their SiGe process.. 3) There was a nice hint in the recent quarterly PR on how MLTC is about to acquire InP technology from a tiny German outfit for OC-768. That's real frugal. Focus on design and try to bring advanced processes inhouse thru partnerships (like IBM for OC-192 SiGe). But OC-768 and >10Gbit/s speeds are at least 2 years off. Even on submarine. Advanced TDM equipment is way too expensive for commercial deployment to justify its cost yet.. 4) You guys here seem to forget the NEXT FORCE of "convergence" btw. datacom and telecom: Gigabit Ethernet. While telecom capex spending by carriers might be in the crapper literally, enterprise network spending by bigger firms for their company backbones is definitely not. Many recent PR's on 10Gbit (OC-192) has direct implciations thru applicability for Gigabit Ethernet also. MLTC potentially can supply to all transceiver manufacturers. Short haul interconnects will be important (even parallel optics need a SERDES chip 4x2.5Gbit= 10Gbit). So this will be a market for MLTC too. And don'T count out Line-card interfaces for routers. I think MLTC could supply this sector also or at least provide some chipset suppor to line card manufacturers.. 5) The latter brings another piece of insight: read Lightwave (recent issues) and you will see while total DWDM system level shipments (the "BOXES") are down from last year (20-40% as to statistic cited), line card shipments are up in volume (not in $$ though). MLTC supplies optoelectronic "boundary" and support chips so they are affected by the strength in the linecard segment not the "boxes" shipped. If you look at revenues, it's holding nicely at $20m+ per quarter and I don't think first quarter levels will be lower.. 6) Finally last quarter's numbers were impacted by unsually high R&D spending : $14m and a massive inventory writedown : $4m. If not for R&D (a DISCRETIONARY item) they would have been earnings positive even with the inventory charge. In fact annual R&D in 2001 was twice the Fy-2000 level at $55m. New process technologies (SiGe, InP) and a handful of metro & Gigabit Ethernet datacom products will be the result of these initiatives. 7) If you calculate a PRR - a Price to Research number you will arrive at an almost ABSURD valuation of a P/RR 3. Normally any figure under 10 is good even for a techstock. Ken Fisher was using this ratio alongside Price/Sales to find the next superstocks.. best rgrds CROSSY