To: fedhead who wrote (12476 ) 7/1/2002 3:58:29 PM From: Bill Harmond Read Replies (1) | Respond to OmniVision Technologies (OVTI) 14.28 +0.04: A look at the one-year chart on OmniVision Technologies illustrates its impressive recent strength. Its outperformance hasn't gone entirely unnoticed as it joined the Russell 3000 Index effective June 30. The index captures the 3,000 largest U.S. stocks as of the end of May, ranking them by total market capitalization. With OmniVision's current cap approaching $320 million, you can be sure that the company ranks well towards the tail end of those 3,000 companies. From an operational standpoint, the semiconductor company is somewhat different from most of its peers as it doesn't manufacture its own product. Instead, OmniVision designs its own product -- and markets it -- but skips the middle step of manufacturing its product by outsourcing production to Taiwan Semiconductor (TSM) and Powerchip Semiconductor. So what does the company 'make'? OmniVision designs single-chip image sensors that capture and convert images for digital still cameras, surveillance systems, webcams, and videophones. Note that its operating results have held up well despite recent macroeconomic softness. For its fiscal fourth quarter, net income rose to $0.07 per share behind a 32% sequential increase in revenues to $13.1 million. For fiscal 2003, analysts project the company will make $0.28 per share on revenues of $113 million. Fundamentally, that translates to a forward P/E of 51x and a forward P/S of 2.8x -- far from inexpensive in the current market, though not many businesses are turning out 32% sequential growth. So long as its technical strength remains intact, this one should be worth keeping an eye on. If the broader markets should ever put together a significant move higher, OVTI is well positioned for a notable break to the upside. -- Mike Ashbaugh, Briefing.com
