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Technology Stocks : PMC-Sierra (PMCS) -- Ignore unavailable to you. Want to Upgrade?

To: Thomas Zoran who wrote (1797)	6/8/1998 9:11:00 AM
From: Bulldozer	Read Replies (2) \| Respond to of 3818

Well lets see, Thomas has thrown in every short sellers macro-dream scenario - Asia & Fed hikes. In addition, we have totally unrelated sectors like general semi-cap equip cos AMAT and NVLS and struggling blue chips like IBM & INTC, and oh yes, 'basic laws of economics' and the grand daddy, chartism! Save it Thomas, this thread is for serious discussion of company specifics and target market opportunities. If this stock tanks, it will be for macro and market related events, not because of their execution or business prospects. Bulldozer

To: Thomas Zoran who wrote (1797)	6/8/1998 9:35:00 AM
From: Trader Dave	Respond to of 3818

A few comments, 3% growth isn't an apples to apples comparison, because their numbers used to include a fair amount of legacy v.34 business. There's clearly market risk here. It's hard to call where the economy and the fed are headed. But I'd have to disagree with thomas' assertions that high margins aren't sustainable. That's true in commodity businesses, but in its core business PMCS is more like a software company in that they own the underlying designs and then their products get designed into their customers products. As long as they can keep designing in performance improvements/cost reductions at the same rate as the networking industry, I'd expect their margins to stay fairly high. I do expect some declines in margins since the company is making forays into more competitive markets. The company is expecting some declines as volumes ramp up, but those declines are already built into analyst's models going forward! (Perhaps with too conservative an estimate for margin reduction.) PMCS may be lofty and have risk from a market perspective, but do you really want to be short a company where earnings estimates are going to go up each of the next 3 to 4 quarters? I'd say there's better stuff to short, with high valuations AND junky fundamentals. (Generally, I only want stocks to go higher when I'm about to sell, I'd welcome a retreat to the low to mid 30's again...I'd back up the dump truck..again.) TD