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

To: Gordon Quickstad who wrote (8005)	4/24/1998 1:12:00 AM
From: Rob S.	Read Replies (2) \| Respond to of 11555

Risk v. reward and greed is what drives the market and right now the glow is off the bloom for IDTI. I think IDTI will move lower and won't likely make a major move up for a few months. Now is not the time to be gallant and overly long-sighted but to either take some profits or hedge your bets with puts or selling of some calls or something. Intel has come out with very aggressive pricing on their low-end chips. AMD and Cyrix have both announced, (see recent CRN articles), that they plan to no longer follow Intel's lead but plan to chart their own course in products and pricing - driving the low end down toward sub $800 and sub $600 PCs. Whether the reality turns out to be all that bad or not may not mean much because once the fear sets in, the analysts and institutional investors will be run like turkeys with their heads cut off. That panic was already clearly on the minds of analysts in yesterday's CC and was followed through today with heavy block selling ahead of any earnings forecast revisions. I don't like posting something negative about IDTI, the future looks great and the company is on the right path for success. But logic doesn't always rule the short-term direction a stock will take. So either lock the shares in the drawer and hold on for the long-term ride or cover yourself.

To: Gordon Quickstad who wrote (8005)	4/24/1998 1:18:00 AM
From: Xianming Liu	Read Replies (2) \| Respond to of 11555

Gordon: An EPS of $0.02 surely does not differ much from $0.03. However, what hurting the share price is the forward projection of mid single digit growth for the next several Q's. In addition, the management indicated that the sales of communication products, which amounted to 57% of total revenue for the past Q, (primarily to Asia) have dropped significantly and are expected to be weak for next few Q's. The C6/C6+ winchip business, in stand alone basis, will not be profitable until the 3Q. The revenue that IDTI can expect from the Clear Logic is at most $2 M per Q for next few Q's. You got to ask where the earnings will come from. Finally, market's acceptance of C6/C6+ Winchip well into 1999 is not a sure thing. It is those concerns that are pressuring the stock price. Having said the negative side, we need to look at the bright side of IDTI. First, unlike AMD, NSM, CY, and ISSI, IDTI made money and managed to grow the revenue in last Q. In contrast to the heavy insider sales in AMD, NSM, and CY in last year, IDTI's insiders put more than $8 M of their own money into the stock in last 12-15 months. If I remember correctly, the most recent buy was about 3 months ago at $13-9/16, which is higher than the current price. To a large extent, whether to sell/hold/buy depends how fast the business recovers. It is thus important to watch where insiders put their money. Let's pay some attentions on IDTI insider tradings.

To: Gordon Quickstad who wrote (8005)	4/24/1998 11:32:00 AM
From: Samuel R Orr	Read Replies (1) \| Respond to of 11555

I'm beginning to worry about you, Gordon. You rationalize exactly as I do, and everything you say is sensible and logical. Intel has found itself in mild trouble, and things are likely to get worse. Long term, Intel has an implacable opponent with whom it cannot contend: its own past success. Intel doesn't really want to deal with sub-$800 dollar computers, since the microprocessor for the box will bring them considerably less than a hundred bucks, but that is the way a large part of the business is trending. Computer sales will actually be an incredible success story this year, because the number of units sold will increase by more than fifteen percent from an already huge base. However, to a DataQuest forecasting marketing numbers, or company such as Compaq or IBM that prefers to sell relatively expensive computers, it will be a bad year, since the dollar volume of computer sales will increase by only 3 or 4 percent. The winner is humanity. All those guys who really can't read or spell now will, after a fashion, be able to play games at home. My view, like yours, is that IDTI will be well-positioned with its WinChip to take advantage of the low-end business. They aren't going to become an Intel, but earnings should increase nicely. Telecommunications will also pick up as parts of Asia recover, and Clear Logic might help a bit, though that success is harder to call. At any rate, IDTI has greatly reduced dependence on SRAMs. I'm a vulture at heart, bought a bit of the stock under ten bucks, and am sitting around poking at the carcass waiting for the beast to get up and run again. I think it will. That was a good post you wrote, and I want you to take it to every analyst in town to memorize as a mantra. Patience is what we must have, though I remember the old joke about two vultures waiting for days on a high wire for an animal to expire. Finally, one of them looks at the other and says, "Patience, hell. I'm going to fly down there and kill something!"