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Technology Stocks : CRUS, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: Frank Povoski who wrote (5697)	4/24/1998 7:41:00 PM
From: w molloy	Respond to of 8193

Interesting (and apparently rounded) article from smartmoney.com (dated 04.22.98). Originally Posted on the Yahoo CRUS board ... Cirrus Logic (CRUS) Not all product portfolios are as black and white as Bell & Howell. Cirrus Logic is a company we've identified in past as having important patents and engineering expertise for analog and mixed signal circuits that process audio and video signals, as opposed to digital logic. In a recent roundup of acquisition targets for Intel, we pointed out that Cirrus' experience in the area of audio processing chips is one of several pieces of intellectual property that could be very attractive to Andy Grove. And at a price of around $11 these days, Cirrus could be a cheap acquisition. But like BHW, Cirrus' portfolio is weighted down by unprofitable applications of that technology, such as chips for disk-drive components, and it has seen key areas of business disappear almost overnight. Sure, the company continues to release cutting-edge products, many of them taking advantage of the desire for integration onto a single chip of several functions that were formerly discrete. For example, the company introduced a chip at the end of March for controlling Digital Versatile Disk players that should be cheaper for systems manufacturers because it integrates several chips into one. And Cirrus' President Michael Hackworth stated back in March that the company will ship about 3 million chips based on designs by recently public chip designer Advanced Risk Machines (ARMHY), which will be good for cheap computing devices such as set-top Internet appliance devices or really cheap sub-$800 PCs. Those devices have a good chance of capturing some portion of the computing market in the next few years, perhaps even a substantial portion. But that alone won't do much to lift Cirrus' fortunes. Despite being at the forefront of the graphics business last year with the first chip to support the Accelerated Graphics Port, an Intel specification for faster memory access, Cirrus saw that lead vanish as its development team was poached by other graphics chip companies. At a recent P/E of 31, there's not much to steal in this stock -- unless, of course, the company gets bought.