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Technology Stocks : VLSI Technology - Waiting for good news from NASDAQ !!! -- Ignore unavailable to you. Want to Upgrade?

To: Sonki who wrote (2947)	2/17/1998 6:07:00 AM
From: shane forbes	Read Replies (2) \| Respond to of 6565

Sonki: VLSI suffers a lot because the market is still apt to be wary of their promises of having turned around etc etc. I recall one of the analysts who very bluntly said that he reduced EPS estimates for VLSI because of the "lack of execution" (paraphrased) that they have shown in the past. Figured he was putting an "execution risk" discount on the EPS. Perhaps it's in the nature of analysts to take a "show me the money" attitude to the companies they follow esp. those that have faltered in the past. But VLSI has shown over the last 4 quarters or so (and even in 1996) perfect execution of their mgt. strategy. Out of PC, focus on communications, the new "fabless" model (which I like a lot!) etc etc. What will it take to bring valuations up to an LSI (who suffers from much the same malaise of a lack of "believability" but granted which trades at a much higher valuation!!)? More quarters of good revenue growth. Perhaps the overreaction to the stock price was the street thinking "here we go again with Mr. VLSI - all promises no follow-through". I find this incredibly hard to believe because they are doing extremely well!!! True Asia and communications area should be hurt but if anyone has an intermediate and long term buying opportunity anything under 20 is a very good buy. Heck if there was better visibility over the n/t over Asia 25 or even 30 would still be "cheap" (may get lower prices at some point over the next few months so I hesitate to call 30 "cheap". Everything is relative!) KLIC, COHU, TER those would be the types of companies I would characterize as assembly and testing and which I like. Enjoyed a very nice ride recently with COHU. Had buy orders fo KLIC at 19 but they did not execute. Darn. (Basically most of the semi-equips are a nice play. I did not research that many. But virtually all I saw I liked over the long haul! That's why just because I mention the 3 above, it does not mean I am excluding others because I did not like them! I also prefer the smaller dominant niche players. HELX is another of my all-time favorites. AMAT is in a league of its own - phenomenal mgt. Probably one of the best groups I've ever come across.) Having said that I really don't understand why the semi-equip front end guys' stock prices have reacted so positively lately. AMAT looks strong. I listened to the NVLS c.call - sounded good. I don't discount the strength of holding these companies over the long haul. It's the intermediate haul I'm concerned about! I find the run-up in stock prices unbelievable!!! (BTW I've never figured how the discounting mechanism works. Some say 6 months forward indicator. If so then maybe that explains some of the move. Still I figure going into this earnings season the prices will be lower. And I would really like to see the Book-to-Bill for Jan. If it has not gone down and probably considerably for the front-end people I'll be stunned!!!) [3 hours!]