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Technology Stocks : Catalyst Semiconductor (CATS) -- What's New? -- Ignore unavailable to you. Want to Upgrade?

To: Nick Bloise who wrote (216)	2/20/1998 11:11:00 AM
From: slob	Read Replies (1) \| Respond to of 436

Nick, Go for it! but don't delude yourself that CATS problems are just Asia. CATS has a lot of problems that will prevent them from being profitable. The only model that I can find that makes CATS profitable is a world-wide shortage of Flash devices. Now CATS could easily jump to $4 if the future trends changed a little. CATS P/S is 0.2 if they even start to look profitable a P/S = 0.8 is likely (thats a stock price of $4) 400% higher than todays prices. I'd like a piece of this action when / if it happens, that's why I keep a close eye on this stock. But for me CATS is a trading stock I can se no way for them to win in the long run. They are in the commodity memory market, the only way to win, in this game, is to have the lowest production and development costs. This is the Micron model and it works. CATS is trying to be a smaller player with very low overheads that can ride out the market down-turns and make huge profits in the good years. Sounds good, but they have a problem with available capital. If you look at the 10Q nearly all the current assets are tied up in Inventory or WIP. This begs the question, if memory prices change, how will CATS be able to ramp up production to best profit during the good times. On the positive side. I think there is still another run-up left in this stock. Now that DRAM fundamentals are improving we should see a change in the Flash Market which will help CATS. I just hope that management is thinking about ways to increase available cash (that don't involve discounted convertibles). Slob