Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : LSI Corporation -- Ignore unavailable to you. Want to Upgrade?

To: DanZ who wrote (14498)	8/22/1998 4:50:00 PM
From: Jock Hutchinson	Read Replies (3) \| Respond to of 25814

Dan: Your message is erroneous. LSI did pay for Symbios in cash--not in stock as you wrote.

To: DanZ who wrote (14498)	8/22/1998 6:00:00 PM
From: thomas hayden	Read Replies (3) \| Respond to of 25814

Just some random thoughts about LSI. First, a couple of days ago I read a report from the Prudential Analyst(from someone who kindly posted it here) that made comments about how much overcapacity LSI will have when Gresham comes online. Well, that might have been true, but I think the analyst is missing the boat on one of the true reasons why LSI bought Symbios. I'm sure (well at least I hope) that one of the reasons Wilf "a swing and a miss" Corrigan eyed Symbios is to move their manufacturing to Gresham. Someone please correct me if I'm wrong but Symbios farms out most of their manufacturing. I would think that a large part of Symbios' manufacturing in the future will take place at the Gresham plant. I know this isn't an Einstienien discovery, I'm just not sure why the Pru analyst wasn't thinking along those lines. Maybe its because Wilf didn't tell him that verbatuim. Also Dan I would have to disagree with you that Symbios earnings are built into the price. Last year Symbios earned 60 million +, granted business is probably worse now, but it can't be that much worse or LSI wouldn't have bought them(and maybe I'm giving LSI management too much credit), plus LSI should be able to provide them with some cost savings. So lets say the minus in business is nullified by the + in cost savings. That's another .43 a year onto the bottom line. I just have a gut feeling that this quarter isn't the beginning of a trend. Even if it was with Symbios they could earn over a dollar a share next year. But I'm guessing they can earn 1.40. I have been following LSI for 9 months, and one thing that is certain, Wilf can't see beyond his headlights. I remember last Christmas Wilf said that Semi prices should stabilize and begin to rebound this year. And the most recent announcement about this quarter, and a couple weeks later having to retract everything made him look pretty stupid. I'm also fairly sure that Wilf is not on Tom Kurlack's most admired CEO list. I think Merrill Lynch will be slow to up its opinion another time after being burned. But I think the stock may look interesting at these levels. (It's to bad I bought too soon.) Short term the bad news is behind us. I think we are due for a small rally in this stock, and will probably fill in the gap created with the announcement. I think we could trade up to 18 to the 19 range and then come back and test the lows and starting building a new base. Two things that I think are important for the future of LSI, is one the growth of DVD. If you think DVD will catch on in a big way this is probably a good one to own. Second I think a renewed Sony contract is important. Primarily because of the physcology surrounding LSI and Sony. Many people seem to associate LSI with Sony, and if LSI isn't making Sony playstation chips I think a lot of people will wrongly view that as an end of LSI. Plus LSI needs that capacity and can also use the revenue. LSI's balance sheet looks good, receivables and inventories aren't jumping up, they have a current ratio of 2 to 1. Cost don't seem to be increasing. We just need an upturn in the Semi market. I think when the upturn comes we could triple from these levels.

To: DanZ who wrote (14498)	8/23/1998 6:51:00 PM
From: BWAC	Read Replies (2) \| Respond to of 25814

LSI/Symbios From my talk with LSI IR on Thursday I found the following: 1. Symbios did farm out some of their "higher end" manufacturing. LSI can and will now do this in house at Gresham. However Gresham has been put off coming online until December. 2.The purchase of Symbios will be done under the purchase method. ie. some sort of goodwill will be booked. 3.Previously I have theorized that our 15 price now is made up of 9.50 "old LSI" plus 5.50 of Symbios. And I stand by that. Yes there will be no "net" change in assets, book value etc. But from the info we have, we know sales of Symbios were 600+ million and they were supposedly profitable by 60 million. So IF IF IF, as LSI thought, Symbios sales and future earnings potential were worth 5.50 per LSI share, then the old LSI must be only valued at 9.50 right now. Which I think is ridiculously low. Symbios could possibly add 40 cents to earnings if sales and margins stay the same. I think my theory is based more on the increasing sales and earnings potential (hopefully) than on book value changing