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Technology Stocks : Vitesse Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: gda who wrote (1245)	3/2/1998 2:42:00 PM
From: The Ox	Read Replies (1) \| Respond to of 4710

I fail to see how VTSS will fall to 20. At the current time that would give VTSS a PE of about 21. Even with the higher tax rates and the cost of starting up the new plant consensus estimates for earnings come in around 35% growth with the lowest estimate coming in at 16% growth. Until such time that VTSS fails to meet quarterly estimates I will continue to have my investment $ in this company. VTSS's management has shown superior ability to manage this company by increasing sales and decreasing costs within the limited resources currently available. Simply looking at price to sales ratios is not good enough, especially in this market place. MSFT trading at somewhere around 18 times sales is a perfect example. No, I am not saying that VTSS is in the same class as MSFT, I am simply using this as one example of the current market's valuation model. Managing this company's fast growth and making sure that the bottom line has been the #1 priority is why VTSS continues to trade at a slight premium to it's growth rate. Showing 12% qtr to qtr sequential growth while reducing costs and maintaining book-to-bill is a track record any management would be proud of. The secondary offering at 37 was another example of how well run this company is. I believe most of the money raised is still in the bank. The viewpoint that VTSS is a has-been company and will not grow in the future is something I can't agree with at this time. Michael

To: gda who wrote (1245)	3/2/1998 7:45:00 PM
From: slob	Respond to of 4710

gda: What valuation methods do you use? It seems to me, from reading your posts, that you believe the winner will be the biggest heaviest semi company. Now I have nothing against this valuation "yard stick" but it's not applicable to all companies. IBM, DEC and TXN are good examples of this concept failing. Personally I'm sick of hearing how much profit these big semi companies will generate ONCE they get all the capacity they need. Do the math on it some time and you will find that the equations only work out positive if nobody else joins in the race, otherwise you find that 2 years later everyone has double capacity and prices have halved. Slob