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

To: uu who wrote (9910)	2/19/1998 4:33:00 PM
From: Duane L. Olson	Read Replies (1) \| Respond to of 25814

Addi, O SLB, You did indeed call Kurlak's number back then!! But don't you think we have beaten up on that poor man enough??.. The day he did the downgrade on MU, the Magnificent E! and I jumped in with both feet (mine were the cold ones)...I dumped too soon.. Like Shane, the WW, says.. Can't hurt to take a little off the table... and that's what I was thinking selling under 30 (!!).. And now I missed the start of this really nice, and projected nicer, INTC move.. Mathon was in at the support point with the 90 calls... is that a good move or what... I don't think he believes Kurlak (bless his bones) either <ggg>... Thank god for Kurlak, though, Addi... what better contrarian indicator ?!! Cheers, O Supreme LSI Bull!! The Saintly One

To: uu who wrote (9910)	2/19/1998 5:24:00 PM
From: shane forbes	Read Replies (1) \| Respond to of 25814

continued from previous post... In the next few years LSI the 2 companies is going to become LSI the one company. Here's how parts (a) and (b) will grow: Revenues (in millions) ----------------------------------------------- (a) (b) Total (baseline) P/S (baseline) 1997 780 520 1,300 2.5 1998 740 700 1,440 2.8 1999 700 960 1,660 3.2 2000 650 1,340 1,990 3.6 2001 580 1,810 2,390 4.0 2002 520 2,440 2,960 4.3 Here we assume that company (a) decreases at rates of: -5%, -6%, -7%, -10%, -10%. And company (b) grows at: 35%, 37%, 40%, 35%, 35%. (Now that I've done this I'd like to reduce (a) faster. But not going to calculate the numbers again!) ------ So how will the above translate into LSI the combined company's stock price: P/S Sales Price(Cap.) Shares Share Price 1997 2.5 1,300 3,250 140 $23 1998 2.8 1,440 4,030 140 29 1999 3.2 1,660 5,310 145 37 2000 3.6 1,990 7,160 150 48 2001 4.0 2,390 9,560 155 62 2002 4.3 2,960 12,730 160 80 and accelerating faster as time goes on.... What's happening is that the bad LSI company (a) is too much of a drag now and only later on down the road will the good company (b) be able to overcome the effects of company (a). Two things are happening. Sales growth of course but also the higher valuation metrics that accompanies it (since company (b)'s greater profit margins are coming into play.) Of course the big issue is whether 5.0 times sales is a good number for (b). Don't know but close enough. (BTW baseline in all of the above means calculated using long range growth rates. The other thing is to remember is that the stock price will likely fluctuate anywhere from I'd guess 30% around this baseline number easily! Likely with a hiher bias.) Also I fully expect a bout of major semiconductor euphoria in the years 1999 or 2000. If past history is any indication premiums on stock prices can go up 50% at that time. Which in turn suggests that 80 or 90 bucks a share in Y2000 is not out of the question. ----