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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (2897)	4/25/2002 10:55:21 AM
From: Cary Salsberg	Respond to of 95463

I don't think current revenue is too useful since we all know it is trough revenue. Enterprise value is important and so is the estimates of future losses, both magnitude and duration. Most important is future expectations when business turns up. Here a discussion of market share, growth of markets, and competitive position are key. I admit that these are more difficult, but without these, I just stay away whatever the ratios say.

To: The Ox who wrote (2897)	4/25/2002 11:06:36 AM
From: BWAC	Read Replies (1) \| Respond to of 95463

Michael, Your numbers and rationale seem very good to me. I cannot argue, nor suggest a better way to arrive at your calculated conclusion. Its a clear, concise, reasoned, valuation and analysis. But does it give a relevant answer at BOTH the peaks and depths of a semiconductor cycle? As in we all know by now that business sucks for AMCC. Your calculated 7X is definitely a high number if we were near a peak. Amazingly people were falling all over themselves to pay 10X your 7X at the peak sales for AMCC. Why I don't know? Anyway I don't find it inconceivable that current revenues could significantly increase (at some yet to be determined future date)leading to a ratio much lower than 7X and nearer your target ratio. Further your model gives no consideration to the operating leverage of a fabless chip company during a period of increasing sales. IE Revenue could double with a much lesser corresponding increase in operating costs. Is there any room in your model for such business cycle events?