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

To: 5,17,37,5,101,... who wrote (9010)	6/27/1998 2:19:00 AM
From: neverenough	Respond to of 11555

FWIW..... S&P Stock Report as of 6/20/98. 20-JUN-98 Industry: Electronics (Semiconductors) Summary: This company designs and manufactures high-performance integrated circuits using CMOS and BiCMOS process technology. Recent Price 7.00 52 Wk Range 16.50 - 6.56 Yield Nil 12-Mo. P/E 70.0 Quantitative Evaluation: Outlook (1 Lowest - 5 Highest) 5- Fair Value 13.80 Risk HIGH Earn/Div Rank B- Technical Evaluation: NA since NA Rel. Strength Rank (1 Lowest - 99 Highest) 3 Insider Activity Neutral Overview 04-JUN-98 We expect revenues to be about flat in FY 99 (Mar.). Both unit demand and pricing remain weak in the SRAM market, reflecting slower end market growth and industrywide excess capacity. However, the company is rapidly transitioning away from commodity SRAM and focusing on more proprietary memories and microprocessors for sub $1,000 computers. IDTI shipped more than 100,000 WinChip microprocessor units in the fourth quarter of FY 98, and is quickly ramping up production volumes. In the near-term, however, it is unlikely that microprocessor sales will ramp quickly enough to offset declines in SRAM revenue. PC market growth is being hampered by excess channel inventory, and the company faces stiff competition in the microprocessor arena. IDTI will need to significantly increase capacity utilization and yields in order to boost operating margins. We expect a loss per share of $0.25 in FY 99, down from EPS of $0.10 in FY 98. Valuation 04-JUN-98 The shares of this chip-maker have been volatile in recent months, as weak industry conditions have hindered prospects for a turnaround. To diversify its product portfolio and expand its served markets, IDTI has invested heavily in R&D. As a result, long term growth prospects have improved significantly. For the near term, however, weak SRAM market conditions will continue to hinder profitability. Furthermore, IDTI derives approximately 20% of its sales from Asia, and is vulnerable to the economic downturn in that region. While IDTI still faces considerable challenges in returning to former profitability levels, we expect new product offerings to push revenues and earnings higher in the long term. The shares, recently valued at 1.3X trailing sales, are a worthwhile holding for aggressive investors.