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Microcap & Penny Stocks : Tokyo Joe's Cafe / Societe Anonyme/No Pennies -- Ignore unavailable to you. Want to Upgrade?

To: Manfred who wrote (59137)	3/2/1999 7:38:00 AM
From: Mr. Big	Respond to of 119973

National Semiconductor - $3 in cash - Book Value $10 - Price $10.25 biz.yahoo.com After absorbing Cyrix in 1997 (management must be happy to finally have those details behind them), the combined entity soon emerged as one of the players in the sub-$1000 market. Shares of National rallied to over $40 in early January 1998. Then, disaster struck as Advanced Micro Devices stole all but .4% of National's market share in the sub-$1000 market. Shares plummeted on the news, hitting an all-time low of under $8 in October '98, and currently trade at around $13. With Wall Street darlings like Intel (INTC), Advanced Micro (AMD), and now Applied Materials (AMAT) stealing the spotlight and soaring to new highs, investors have all but forgotten National. However, behind CEO Brian Halla, National is turning things around and is looking to capitalize on new paradigms. Namely he's betting on the success on network connections and single chip systems. Take Cyrix's MediaGX processor for example. Currently, it integrates graphics, audio, and memory control into one single chip as opposed to current set-up of separate devices on one motherboard. National aims to include even more features like DVD controllers, and other audio/visual capabilities. And, as Gilder says, National is one of the few companies that have the digital and analog skill-set to make this happen. Basically in this single-chip system, National saves space and processing power as all of the necessary transistors will remain on one architectural hierarchy. National's single-chip module won't be penalized for jumping from one chip to another. This revolutionary mentality has a huge potential payoff as projections show that Qualcomm will be vying with Nokia to become the top PC producer by 2005. Minimizing processes and memory is essential in such PCs, therefore National's architecture could be the cream of the crop. Halla's single-chip strategy also transposes into his dream for increased networking capabilities. National has combined its Ethernet technology with recently IPOed, Tut Systems', high-speed networking HomeRun technology to create a single chip for home and LAN networking. So is this all too much, can National right its ship and make Halla's fantasies a reality? We think so. National overtook Intel in sub-$1000 PC November '98 sales, grabbing nearly a third of the market share. National is looking to continue its domination of this market as it currently has agreements to supply NEC-Packard Bell and a Korean venture, eMachines (producers of $400 PCs). National has also inked deals with Casio and Palmax to power their respective hand-held devices. And, the real value of Hallas' new paradigm remains unseen as the market has yet to evolve. IDC predicts the market for information appliances will grow from 5.9 million in '98 to 55 million in 2002. Not only has National once again made itself a contender with such a wide array of products, the company also boosts some excellent fundamentals. Gross margins are increasing and revenues have been on the up and up. The company currently trades at a price/book of $10/share and has $3 of cash/share. Its price/sales ratio is just over 1, dwarfing Intel's 9.43 and Applied Material's' 5.88. All told, this makes for a great contrarian play on the information revolution. Disrespected by Wall Street, we think National makes a nice addition to The Bullish.