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Technology Stocks : Synaptics -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (51)	2/16/2005 3:09:28 PM
From: Sam Citron	Respond to of 191

ADBL is not shining I have a Yahoo watchlist that I follow called iPod. It consists of: AAPL ADBL CREAF LOUD NAPS PLAY RNWK SGTL SIRI SYNA XMSR (though admittedly SIRI and XMSR really belong in a separate category). I would refer to the others as iPod derivatives, because they owe much of their recent strength to the success of the iPod platform. With AAPL now about $90 (at least until it splits/ market cap > $36B) many investors have hopped on one of these "derivatives" as a pure play on the iPod phenomenon. We have now seen first SYNA and then ADBL implode, but for very different reasons: SYNA out of fear of losing its biggest customer (Apple) and now ADBL, because it is investing for the future, which is going to cause profitability to shrink markedly in the nearterm. I've listened to the ADBL conference call, and it appears to me that they are doing the right things, even though the analysts hate them for blowing up their models. The main reason I have not touched ADBL is valuation: P/S 18.4 vs 3.8 each for AAPL and SYNA, even though ADBL margins are lower. Someone must think the future growth justifies such valuation, though there is little real competition yet, and barriers to entry would seem to be on the low side. PLAY came public only 3 months ago and has been in a slide lately too. Dolby Labs is scheduled to come public tomorrow. SGTL meanwhile has not yet missed a beat. Sam