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To: Redhook who wrote (18626)	1/19/1999 11:59:00 AM
From: DanZ	Read Replies (3) \| Respond to of 53068

VLSI. VLSI released two stories yesterday that could give the stock a boost to recent highs at 13 3/4. The first announcement concerns VLSI's new 0.15 micron manufacturing process which maintains their superiority in the manufacture of Application Specific Integrated Circuits (ASICs). www1.newsalert.com The second announcement concerns a partnership with 3Com to develop an ASIC that will be used for secure data transfer from desktop computers to networks. There are many applications for this product and I think the announcement is significant and will produce increasing revenue and additional design wins for security ASICs. VLSI's DIVX security chip probably helped them win the 3Com design. www1.newsalert.com VLSI has traded pretty much in tandem with the SOX since the stock made a low of 6 on October 8. It closed last Friday at 12 1/16, up 100% from its October low. The SOX is up 121% over the same period. VLSI has underperformed the SOX a little since December and the stock might be plagued by a loss of institutional sponsorship due to a management shakeup last summer. In addition, the company barely broke even last quarter although most semiconductor companies had similar problems last quarter because of slower sales in Asia. We all have our favorite stocks and those who have followed my posts know that VLSI has been one of my favorite trading stocks for almost a year. I have been long and short, day traded it, and held it for longer periods of time. I think the time has come to take another intermediate term long position in the stock, not only because the chart look good, but because I think the company will win back institutional support with recent product offerings and improved earnings. Another significant product is their CDMA+ ASIC which is rumored to be taking market share away from Qualcomm in the cellular telephone market. The daily, weekly, and monthly charts all looks good and I think the stock will test resistance at 15 after getting through 13 3/4. After 15, there isn't much resistance until it gets to 20 to 22. In summary, the move in VLSI from 6 to 12 is supported by improving forward looking fundamentals and a bullish undertone to the SOX. The company has about $7 per share in cash and a book value of about $12. Even with the 100% increase in the share price since October, the stock is still trading at less than 1 x sales. This is almost unheard of for a semiconductor company with the degree and quality of IP that VLSI owns. Do your own research but I think the time has come to take a long position in VLSI with an intermediate term target of 20 to 22. Dan