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Technology Stocks : SMSC Standard Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: John Prugh who wrote (305)	11/26/1998 12:31:00 PM
From: KEN MATSON	Read Replies (1) \| Respond to of 335

My opinion is that SMSC has a lot of potential from this level. Of course, selling for a tax loss depends on other factors. The reasons for buying SMSC at this level are: 1. PC sales are growing nicely and SMSC's sales are directly related. 2. You are buying a company for 60 cents for every dollar of equity as shown on their books. Keep in mind that this is a company that has a vast amount of intellectual property and that spends $1/share per year on R&D. 3. You are buying a company for $8/share that has about $11/share of sales, even at low current sales levels. 4. You are buying at a time when almost everyone is disgusted with the stock, and at a time when it is being depressed by tax loss selling. Almost everyone who owns the stock has a paper loss. 5. SMSC is selling at a price where it could make an attractive acquisition even at a price of $15. I would expect to see both top and bottom line improvements going forward. If they are significant, as I hope, the stock should do nicely. If they don't, the downside risk is relatively low.