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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: LKO who wrote (20496)	1/20/2005 11:22:14 PM
From: Spekulatius	Read Replies (2) \| Respond to of 78666

LKO, i never endorsed buying EBAY or QCOM for their respective valuations nor do I hold a position in either one. I readily admit that ISIL and OIIM are not straightforward value plays. The reason i like those stocks is because both of them are in the most attractive market segment,namely analog, which has the highest gross margins. While recent results and in particular growth for both of them have been poor, they are solidly profitable and generate sold free cash flow (about 5% of EV). both of them investor in excess of 20% of revenues in R&D, which hopefully will lead to attractive new products and renewed growth. If this happens there is substantial upside, as is evident by valuation of both top dog analog semis, MXIM and LLTC which are trading at 8x and 10x revenues. you can do the math what it would mean for ISIL and OIIM if they were similar valued (which i admit is a stretch)