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Technology Stocks : Brocade Communications Systems,Inc. (Nasdaq-BRCD) -- Ignore unavailable to you. Want to Upgrade?

To: Bridge Player who wrote (1540)	4/30/2004 12:05:53 PM
From: E_K_S	Read Replies (2) \| Respond to of 1583

OT - A bit more on LSI I posted this on the LSI thread back in January 2004 (http://www.siliconinvestor.com/readmsg.aspx?msgid=19680735). In general it is still accurate IMO but the next semi cycle has really not had any traction and perhaps may slip 6-8 months from my earlier target guess. When the cycle picks up and gets going it usually lasts 30-36 months and earnings peak. I would not be surprised to see upwards of $0.80-$1.10/share in peak earnings. Right now we are treading water at break even to $0.10/share earnings. The only other change in the company is that they are now utilizing more of their in-house FAB capacity and have structured "several" manufacturing out source agreements in anticipation of the eventual up turn in orders. Management has restructured (took a big write off late last year), are looking to payoff their convertible debt once their storage division is spun off and rumor on the street is that their Oregon FAB could be sold if the right offer develops with acceptable 2nd source manufacturing terms. The CEO still owns tons of stock he purchased early last year. So LSI is both an undervalued asset play and has the potential for significant upside earnings. Bare bone assets (storage division and FAB plant) probably represent $7-$8 per share and peak earnings potential $0.80-$1.10/share depending on product mix and unit margins (they have maintained 43% margins w/ their new product lines). A PE of 20-25 is not unreasonable. My target guess for $25-$27 is peak earnings of $1.00 with $7.00 in asset sales and/or divestiture (spin off of storage division and sale of Oregon FAB) If it trades in the $5's again, I will probably pick up some more shares.