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To: Dale Baker who wrote (3416)	3/9/1999 1:34:00 PM
From: Mao II	Read Replies (1) \| Respond to of 118717

DB: LTXX is a little chip tester with a relatively attractive price. While the actual semi fundamentals are improving, there is obviously no guarantee the cyclical upturn will be smooth and uninterrupted. There is considerable foreign weakness, and South Korea is still rocky, despite all kinds of improving signs. Japan is giving similar signs of life, at least in the markets, but real improvement and a return to solid growth is not there. A word of caution, semis and equipment makers are deep cyclical businesses and when they get slammed, it leaves you reeling and dizzy. That said, the sector has come a long way and I think we may even avoid a massive spring slide. If that is the case, the recent weakness could represent a short-term bottom. I like AMAT, as you know. I like CYMI. I like ASML. I have not added to those positions. I tried for some ASYT, but it didn't come down far enough. That left me with a 3d tier chicklet, LTXX, (I'm gonna try for PLAB this week if I can get it at or near 20 or less), which I think will move up past 5 if we're lucky and even past 6, if we are more than a little lucky. As such it would be a small little success within the larger theme of the thread. Here is a fairly recent individual investor analysis that I just found posted somewhere. It gives you a good look at the numbers. M2 LTX Delivers Better-Than-Expected Results We continue to be optimistic on the outlook for shares of LTX Corp. following the company's surprise return to profitability in its second quarter of fiscal 1999. For the second quarter, LTX reported revenue of $33.7 million and net income of $1.1 million or $0.03 per share. Earnings per share were positively impacted by $3.8 million related to changes in LTX operations. Without the benefit of this one time accounting gain, LTX would have incurred a loss of $0.07 per fully diluted share. The operating loss of $2.6 million was far better than our expectations of an operating loss of $3.3 million. In the second quarter, LTX shipped six Fusion systems to customers. The book-to-bill ratio for the quarter was above 1 for the second straight quarter, and bookings increased by 20% sequentially. We are encouraged by the strength in bookings, and believe that management has improved visibility into its revenue stream over the remainder of fiscal 1999. In fact, shippable backlog extends through the fourth quarter. By focusing on a single product line, LTX has been able to bring its expenses down to levels that should enable the company to return to profitability in the fourth quarter. Operating expenses declined sequentially by $900,000 despite an increase in revenue of $6 million over 1st quarter levels. We expect continued margin improvements as higher revenue levels improve operating efficiencies. LTX management has done a remarkable job of stabilizing operations in light of the downturn in the capital equipment market. Our recommendation was predicated on our belief that LTX's new Fusion product line would be met with strong customer demand and that the valuation of LTX clearly did not reflect its potential or technology value. Despite appreciating by 80% since our initial recommendation, LTX shares can trade higher over the coming months. LTX has earnings power of over $0.50 per share in fiscal 2000. As operations continue to improve, shareholders will continue to be well rewarded. We are introducing a fiscal 2000 earnings estimate of $0.45 per share and are upwardly revising our price target on LTX to $9.00 or 20X our earnings estimate. Analyst: Eric Singer Updated on February 24 with LTXX at $4.75 Recommended on 11/16/98 at $2.50