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To: Jurgis Bekepuris who wrote (19380)	7/1/2004 12:15:14 PM
From: Madharry	Respond to of 78516

Caveat emptor on OVTI. technically it stinks. This is one case where I would forego the first 20% of the gain in order to satisfy myself that i am not revisiting micron technology of several years back, where great margins and superb profitability evaporated.

To: Jurgis Bekepuris who wrote (19380)	7/14/2004 3:56:12 PM
From: Jurgis Bekepuris	Respond to of 78516

Added to losing OVTI position. IMHO, the fears are overdone, but please do your own research. Jurgis

To: Jurgis Bekepuris who wrote (19380)	7/21/2004 1:56:28 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78516

Okay, I'll follow you guys into OVTI. finance.yahoo.com

To: Jurgis Bekepuris who wrote (19380)	7/29/2004 12:00:43 PM
From: - with a K	Respond to of 78516

I bought some OVTI this morning, even with the ugly chart and noting Jurgis' flags. Per Yahoo, 10 analysts expect an average of $1.48 next year with EPS growth of 22.5% annually for 5 years. Per First Call, OVTI has had a PE above 20 from Q1 '03 to Q3 '04. I've scaled both of those back but it still has a compelling value IMO. Company: OVTI Date: 7/29/04 Next year's expected earnings: $1.48 EPS growth rate used for estimate: 15 P/E maximum used for estimate: 12 Graham Fair Value: $43.76 Current Price: $11.48 $ difference: $32.28 Percent Growth to Fair Value: 281.19% SM July 12 column snip: OmniVision's stock woes began when, instead of reporting fiscal 2004 fourth-quarter and year-end results on June 9, the company announced on that day that it would reschedule the release to June 23, and would likely be restating past results. Management in the release tried to put on a happy face — "Could Upwardly Revise Prior Sales and Net Income" sounded almost like a plus — but nervous investors bailed, sending shares to $16 from $25 within a week. The June 23 report did little to help, despite showing sales for the fourth quarter ballooning 150% to $99.7 million and earnings jumping 242% to $20.8 million. Per-share earnings of 34 cents topped analysts' expectations by two cents. But the restatement, which raised per-share earnings by four cents in the second quarter and a penny in the third, nonetheless left investors rattled. Shares today fetch about $13. Needham & Co. analyst Quinn Bolton calls the restatement "unfortunate but not fraudulent." He notes that it relates to two things: a distributor being slow to report sell-through revenues, and certain shipments being incorrectly classified. Bolton calls the pullback "an attractive buying opportunity." (Bolton doesn't own shares of OmniVision; Needham & Co. has an investment-banking relationship with the company.) How cheap is OmniVision's stock right now? Plenty, it appears. It trades at just 9.8 times Reuters Research's fiscal 2005 earnings consensus of $1.33 per share, compared with an average price/earnings multiple of 24.4 for semiconductor companies. And OmniVision is projected to boost earnings by 22.5% annually over the next five years, compared with 18.0% for the group. That gives the stock a price/earnings-to-growth, or PEG, ratio of 0.43, well below the peers' 1.36 and the Standard & Poor's 500 index's PEG of 1.56. That looks to us like the very image of a bargain. yahoo.smartmoney.com From Yahoo message board: Why The Lawsuits will FAIL by: ws2000trader Long-Term Sentiment: Buy 07/28/04 06:48 pm Msg: 64127 of 64502 Here is why the lawsuits will fail: OVTI has conducted an internal review which was initiated in response to issues raised by an employee of the company. As a result OVTI notified the Audit Committee of the Board of Directors of the issues raised, and the Audit Committee conducted an independent investigation in cooperation with special legal counsel. As a result of the internal review and the independent investigation, management and the Audit Committee determined that certain errors had occurred which principally affected the timing of revenue recognition for certain sales. The independent investigation concluded that there was no evidence of wrongdoing in connection with these errors. As a result of their findings, OVTI, under direction from the Audit Committee, is in the process of making improvements to its internal controls and information systems. So what happened? There are only two (2) issues regarding the restatement: First, beginning in the second half of fiscal 2003 and continuing through the first nine months of fiscal 2004, certain distribution sales, for which the Company recognizes revenue on a "sell-through" basis, were not reported to the Company by one of its distributors in a timely manner. Second, In the second and third quarters of fiscal 2004, during the transition of testing operations and certain international sales functions to overseas locations, some shipments made to customers late in the quarter were “incorrectly classified” as transferring title upon delivery as opposed to upon shipment, and therefore revenue was not recognized when product was shipped. The result: Increase of Revenue of some $8.9 Million and Earnings of $2.8 Million. On June 9th, OVTI thought there might be an increase of approximately $5 Million in Revenues. As for the current Qtr: Projected Wall Street Revenue forecast was for was $102 Million with Earnings at $0.32/share. Actual is $99.7 in Revenues with Earnings at $0.34/share. In actuality, OVTI beat the street by $0.02/share on earnings. Gross Income = Revenue Total Earnings = Revenue less Expenses – what’s left over is most important Earnings are what rules and dictates a company’s health. If the earnings per share increases, the company is doing very well. In OVTI’s case, the revenue miss between Wall Street Revenue forecast of $102 Million and the actual $99.7 Million is mute since the earnings are greater on the actual lower amount than the projected forecast amount