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Technology Stocks : VLSI Technology - Waiting for good news from NASDAQ !!! -- Ignore unavailable to you. Want to Upgrade?

To: Trey McAtee who wrote (3475)	5/26/1998 7:01:00 PM
From: DanZ	Read Replies (2) \| Respond to of 6565

All, I think VLSI is nearing a bottom and here's why. 1. VLSI tracks the SOX index very closely and the SOX has good support at it's lower weekly bollinger band near 260. The lower weekly bollinger band is rising and this should offer even stronger support. 2. VLSI has many lows in the 15 area on the weekly chart. Take a look at October 96 and January 97 and you will see what I mean. 3. The daily chart is extremely oversold and once the momentum changes, the stock will move quickly to the upside. I have a large position in VLSI and called Investor's Relations today after the market close to discuss a few things. I spoke to the Treasurer, Mr. Sunil Mehta, about earnings guidance, revenue guidance, assets, book value, and the stock. A summary of my conversation with Mr. Mehta follows. 1. Earnings for June quarter: the company is expecting earnings to be flat with quarter 1. I mentioned that the mean estimate is 9 cents but it seems like the stock is pricing in something lower than that. I gathered from his response that they are comfortable with 7 to 9 cents. 2. Revenues for the June quarter: Revenues are expected to be flat with quarter 1. When I asked him if revenues would be in the area of $140 million, he said yes. Mr. Mehta added that management has not guided analysts down from their current projections and I took this to mean that the company expects to meet the current estimates. While things could change in the last few weeks of the quarter, I gathered that business conditions have not deteriorated to justify the recent move in the stock price. 3. I asked Mr. Mehta if any assets will be written down in the near future that would materially affect the book value. He answered emphatically NO so whoever alleged that on this thread was lying and just negative hyping the stock. With the exception of depreciating assets in the normal course of business, the company would not report any write offs. I asked him if the book value would change materially from it's current $11.3 and he said no. 4. We talked briefly about the stock price and Mr. Mehta said that he thinks the move is related to the overall semiconductor sector and not to any fundamental changes at the company. He said that VLSI is more volatile than many other stocks but that it goes both ways, up and down. While he wouldn't say it directly, I got the feeling that Mr. Mehta thinks the stock has been unjustifiably beaten down. The bottom line is that the stock is in a downtrend but I think it has run its course. Hang in there if you are long. I think the stock will turn around soon. If you are short, congratulations. Don't let it all slip away. I'm off to get a drink. I have a headache for some reason LOL Better days are ahead. PS to Trey: <anyone care to guess what percentage of sales come from asia?> I took the following statement from the 1997 annual report. "The Company currently generates approximately 4% of its net revenues from direct sales into Asia, plus another approximately 7% of its net revenues from direct sales in Japan. However, certain of the Company's significant customers generate greater portions of their sales from Asia and Japan." PS to Doug: I hope to be able to give you some feedback on post 3467 later tonight.