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Technology Stocks : OmniVision Technologies (OVTI) -- Ignore unavailable to you. Want to Upgrade?

To: Labrador who wrote (835)	12/3/2004 12:44:36 AM
From: Elroy	Respond to of 2273

Not to be a party pooper, but you must also reduce OVTI's forward earnings by the reinvestment income (adjusted for taxes) and recalc the EPS to get a revised P/E. If they can get 2.5% after-tax, that is net earnings on the cash of $4.48/shr x 2.5% = $0.11/share. So earnings would be $1.15 - 0.11 = $1.04/share. Still a low resulting P/E IMO. Invenstment income is pretty insignificant for OVTI. Their operating margin has been 20%-26% of revenues over the past few quarters, and investment income has been 1% or less. But your method of calculating forward investment income is interesting. Obviously, OVTI didn't have as much cash a year ago as the do now!