Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : IDTI - an IC Play on Growth Markets -- Ignore unavailable to you. Want to Upgrade?

To: Rob S. who wrote (7674)	4/1/1998 1:27:00 PM
From: flickerful	Respond to of 11555

i knew you would feel right at home... they do know their stuff, huh ... ground floor excitement, rob, there is nothing like it!

To: Rob S. who wrote (7674)	4/1/1998 2:03:00 PM
From: farhash	Read Replies (2) \| Respond to of 11555

From March's issue of Kipplinger's (yes it is Michael Murphy recommending IDT again) A favorite stock of Michael Murphy, editor of California Technology Stock Letter (and author of the just-published Every Investor's Guide to High-Tech Stocks & Mutual Funds), is Integrated Device Technology, a woebegone maker of semiconductors in Santa Clara,Cal. Murphy believes that IDT is on the brink of a profit recovery. Profits at IDT (symbol IDTI, Nasdaq, recent price $12; 408-727-6116) have stalled for most of the past year and a half as the company suffered from an industry-wide glut of the static random access memory chips in which it specializes. It lost 54 cents per share in the fiscal year that ended March 1997 and made just a nickel a share in the first half of fiscal 1998. What makes Murphy bullish on IDT is its introduction last year of a tiny Intel-compatible microprocessor aimed at the burgeoning low-end personal-computer market. "You're going to let your kid grow up in the 21st century and not have a computer in your house?" Murphy asks. He calls IDT the low-cost producer of Intel-compatible microprocessors and figures that IDT will ship one million to two million WinChip C6 units this year. Assuming a price of $90 apiece, "you're looking at a $90-million to $180-million revenue hit." Moreover, Murphy says he's been told by Intel officials that they have no plans to sue IDT for patent infringement (always a risk in this sort of venture). Murphy estimates that IDT will earn 29 cents per share for the fiscal year ending March 1998 and 75 cents for the following fiscal year. For electronics-related high-tech stocks, Murphy determines value by comparing share price with a company's "growth flow," which he defines as earnings plus spending on research and development. Toss in R&D spending of $1.89 per share to this year's earnings estimate and IDT sells at about five and a half times growth flow, making it cheap by Murphy's reckoning. Murphy considers IDT, whose market value is $1 billion, to be a medium-risk stock, mainly because of its modest price and because its new product is already being shipped. His target price is $28. Reporters: Brian Knestout and Stacy Stover 29 cents fiscal 1998 This means they will have to make 20 cents this quarter.