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To: RetiredNow who wrote (74816)	1/6/2008 11:41:03 PM
From: Elroy	Read Replies (5) \| Respond to of 77397

What does OVTI do? They are a semiconductor company - they make a product called an image sensor. It's part of the system that allows a digital camera or cell phone to take a picture. They are in security devices, autos and other products that have digital pictures, but mainly cell phones (65% of sales). They are the only significant independent provider, competition is generally a division in a larger intergrated semi company like Micron, Samsung, etc. 38% of their market cap is net cash, their forward PE is 8.1x, or 5x if you deduct the cash per share from their share price. This is part of the lunacy with this stock - find me any other profitable tech stock with a forward PE of 5x please. 22% of the float is short (been like that for years for some unknown reason, you explain to me please), and this is despite the fact that they reported in the October '07 Q record revenues of $233 million, up 67% YoY, with pro forma EPS of 51 cents. It's a nutty stock that makes little sense on valuation. CEO is in his mid-70s, so one hope is that a larger semi company acquires them for stock. Since OVTI's valuation is so low, a $30 acquisition price would be immediately accretive for many larger semi companies. If not, as long as image sensors go in more and more products going forward, and cell phone move up the megapixel curve (VGA, which is less than 1.3 megapixel, is still the majority share of phones sold), the company should continue generating cash up the wazoo and who knows, if the market doesn't give them a fair valuation maybe a management buyout or a private equity event will.