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.

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

To: 16yearcycle who wrote (11027)	8/17/2003 7:47:53 PM
From: Cary Salsberg	Read Replies (2) \| Respond to of 95658

RE: "IRF" I don't recall if I looked at IRF before. I first look at the Yahoo profile and then the Balance Sheets listed in Yahoo Financials. Debt/Equity is listed as 0.59. Since book is almost $16/share, debt is over $9/share, more than $7.67 cash/share. Since they pay no dividend, more debt than cash reflects the cumulative effect of the entire business history. I looked at the income statement in Yahoo financials for the last four quarters. The best after tax profit was a single digit percentage of sales. I will not add IRF to my prospect list. I chose MXIM and LLTC because they have had very good growth rates, certainly better than most "in their area", and, more importantly, they blow everyone else away when after tax profit as a % of sales is measured. During the past quarter LLTC was 39% and MXIM was 28%. At the 2000 top, LLTC was ~43% and MXIM ~37%. MXIM dipped with the acquisition of Dallas Semi, but they are making very good progress in molding Dallas in MXIM's image and raising the margin. Margins are a very good indicator of competitive strength. This is even more true when high growth and high margins are maintained for decades. Of course, it is important to understand the nature of the competitive situation and why high margins have been sustained. To this end, I queried test engineers when I worked for test companies that sold testers to MXIM and LLTC and most of their competitors, and were the chief tester vendor for MXIM. Unfortunately, test engineers, EEs from Berkeley and MIT, could not attribute the success to any particular engineeering superiority and could only point to a spartan work environment and hard driving, hands on management. I don't mind these kinds of questions. It is always good to restate investment reasoning in a public forum.