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Technology Stocks : Vitesse Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: Lionel Parker Perkins III who wrote (1866)	10/14/1998 11:10:00 AM
From: GARY SETO	Read Replies (1) \| Respond to of 4710

VTSS 23? what's going on? 10% movement before earnings. Gary

To: Lionel Parker Perkins III who wrote (1866)	10/22/1998 2:50:00 PM
From: Beltropolis Boy	Read Replies (2) \| Respond to of 4710

You can log in on Kiplinger's web page and read the article on VTSS. FWIW, the nov issue is now available online. here's the VTSS excerpt: November 1998 Great Stocks on Sale Telecom trailblazers If the information revolution were a Western, the movie might be titled The Quick & the Dead. If you're not quick--if your products can't keep up with or lead the revolution in moving data at ever more blistering speeds--you're dead. One company that won't be pushing up daisies anytime soon is Vitesse Semiconductor (805-388-3700), which makes semiconductor chips of gallium arsenide, as opposed to the more common and much slower silicon-based circuits. Makers of telecom equipment are breaking down the doors for Vitesse's chips. That's because the need for more and faster data links is expected to double each year over the next five years. Moreover, silicon and other technologies are reaching their speed limits or are expensive relative to gallium arsenide. Vitesse has a huge competitive edge because "it's extremely difficult" to make such chips in quantity--unless, like Vitesse, you've been perfecting the process for 14 years, says Prudential Securities analyst Hans Mosesmann. Vitesse's numbers seem to be vaulting as quickly as electronic pulses flow through its chips. Analysts see earnings growing 40% a year over the next three to five years. Sales were expected to hit $173 million for the fiscal year ended September 1998, a 65% increase over the 1997 figure, and earnings per share were expected to reach 66 cents, about double 1997's figure. The consensus-earnings estimate for 1999 is 83 cents per share. Vitesse's lock on the technology and the need of such giant customers as Cisco Systems and Lucent Technologies give it a "near monopoly," says Jim Goff, manager of Janus Enterprise fund. "I view Vitesse as an arms dealer to some of the most successful companies out there." The big challenge for Vitesse now is to spit out enough chips to meet soaring demand. A new plant has started producing 6-inch chips, a much more delicate operation than producing the original 4-inch chips. But so far the new plant is on schedule for full production by the end of 1998. It could provide capacity to boost annual revenues to about $550 million over the next two years. kiplinger.com