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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE) -- Ignore unavailable to you. Want to Upgrade?

To: Thomas Leavitt who wrote (7098)	11/1/1997 6:22:00 PM
From: Bill Lin	Read Replies (1) \| Respond to of 14577

12PE is a backward looking PE. Q4 is around $0.00-$0.10 at best (negative at worst) Q1 '98 and Q2 '98 is the same. Q3 is $0.00-$0.24 (if GX3 gets a ton of design wins). forward looking PE is about 20, as far as i am guessing. but then i am REAL pessimistic. "undergoing expansion out of traditional channels" doesn't make any money right now. Revenues from '96 to '97 growth is around 10%. earnings decline. so, my answer is "no" its not excessive. my argument for a while has been: if S3 is now a value play, then it has to become CHEAP or sell for around 0.5-0.7 times book. right now, there are several "potential" factors holding up the price at $8+, which are Faroudja tech, fab value, and GX3 in silicon. Otherwise, it can trade at 10X forward '98 PE or $3-4. are YOU going to buy the #9 GX2 board? BL

To: Thomas Leavitt who wrote (7098)	11/2/1997 3:44:00 PM
From: Michael	Respond to of 14577

>Anyone think a P/E ratio of 12 is excessively low for a primier >player in a critical market niche that is undergoing expansion out >of traditional channels? I think the key issue is that is the P/E really going to stay 12? With decreasing earnings (conference call) the P/E may prove to be a lot higher in the next 3 coming quarters. Though I believe this is a great long term investment and don't question we will see the upper teens again, I worry that disappointing earnings over the next few quarters could batter the stock even more.

To: Thomas Leavitt who wrote (7098)	11/2/1997 4:21:00 PM
From: Berney	Read Replies (1) \| Respond to of 14577

Thomas, I too favor dominant companies in a market niche. Unfortunately, we tend to make these observations while looking out the back window. Obviously, hazardous while driving the investment by-ways. Having made the same mistake (i.e., S3 dominance), I just finished a newsletter article "Anatomy of a disaster -- S3". I think, for many us, S3 is going to have to demonstrate this dominance before we will again be interested. IMO Until then, the stock is not worthy of more than a short term play as the new batch of suckers buy into the past performance. S3 is a good lesson for all concerned. Good Investing Berney