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Technology Stocks : Spectrum Signal Processing (SSPI) -- Ignore unavailable to you. Want to Upgrade?

To: Brasco One who wrote (3930)	4/12/2004 9:18:31 AM
From: David Semoreson	Respond to of 4400

GMP Securities increases rating on Spectrum Signal Processing Inc. (SSY C$1.74; Target: C$2.00) BUY Resuming coverage and increasing recommendation to a Buy and target price to C$2.00 new F05 estimates of .089 EPS on $20.4m sales We continue to believe that SSY has a unique capability in the emerging field of software-defined radios. Today, the market is primarily limited to military field radios and covert government monitoring of radio and cell phone signals. As the costs of DSP and FPGA processors declines, we believe this technology will increasingly find commercial applications, such as cellular base stations. We are resuming coverage on SSY with a Buy recommendation and introducing a new target price of C$2.00 based on a P/E multiple of 17.5x our forward EPS estimate of $0.09, for the 12-month period ending December 2005. We believe a valuation multiple in the range of 15x to 20x is appropriate for the company given its minimal net cash balance and limited recent track record in delivering revenue and positive earnings growth. Given the promising outlook for the company, we have chosen to use the middle of the range or a P/E multiple of 17.5x. We would consider using a higher valuation multiple for the company as it re-establishes a history of positive earnings growth.