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Technology Stocks : VLSI Technology - Waiting for good news from NASDAQ !!! -- Ignore unavailable to you. Want to Upgrade?

To: Linda Kaplan who wrote (5271)	2/26/1999 10:56:00 AM
From: Ram Seetharaman	Respond to of 6565

My message # 4974 is below: Great Job! For all VLSI watchers, I picked up an upbeat review from the stockscreen listed on page 80 of the January 1999, "SmartMoney" published by WallStreet Journal. They recommend that VLSI is cheaper than it appears due to VLSI holding a lot of cash! For VLSI cash as a % of Share price is a whopping 56%!, the highest in the whole table of stocks (which include ADPT, FLE, KBALB, PHSYB, PAIR, SFA, SKYW, and VLSI). For VLSI a P/E of 18, net cash divided by P/E of 8, Price over book ratio of 0.95, Price over sales ratio of 0.73, 5 year average ROE of 10.7, estimated annual EPS growth rate of 17, Debt over equity ratio of 0.4 all bode well. In my opinion the Debt over equity of 0.4 is probably the drag. The market value of VLSI is listed as $ 520 million. Based on this analysis and a stock price of $ 11.5 at that time, and a debt of $200+ million, today's offer of about $ 776 million looks pretty low. VLSI has about $300+ in cash. So by putting down $776 million Philips gets back $ 300+ million. So if you add $400+ million to a debt of $200+ million they are getting the company for $600-700+ million, which is cheap! I may go for such a purchase when the Semi/Chip cycle has peaked and is heading towards a slowdown! To the contrary we are at the pit bottom of the slowdown and are on the way up! This Dutch company thinks that this is like buying a lot of cheese in a hawker's market in Holland! VLSI and Al don't go for this low offer. You are worth at least $ 25. Get another guy to compete with a $ 25 offer or tell Philips to take a hike!