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Semtech Corporation Message Board

  • ilygod ilygod Sep 26, 2001 9:47 AM Flag

    ominous p/e simply too high. out

    smtc looks like there's strong resistance at 30 range. the p/e appears a bit too high in this current environment. insider selling doesn't stir too much confidence.

    out for now. looking to buy around $18-19

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    • ilygod - I disagree with you. You have a long term sentiment of a sell. Long term is 3-5 years. In 5 yrs every desktop computer in the world will be replaced with a new one. In 5 years every communications device will be replaced with a new one. And the same with test equipment. In 5 yrs SMTC stock price will be much higher. As an investor it's a strong buy for the long term.

      • 1 Reply to smtc_to_100
      • smtc to 100:

        you're absolutely right about 3-5 yr time frame. however, i think SMTC may have seen it's haydays in the past year.

        in the midst of the slow down, earnings fell 68%. that is before all the computer makers, electronic manufacturers and so forth cut spending. thus, how much further do you think earnings will fall? SMTC is not the only competitor in this market and their tech can be replaced both another co. this isn't out of the questions.

        pricing pressure will surely eat into their existing earning. with this view, their top line growth and bottom numbers will be hard to maintain.

        in the past, p/e of 54 was acceptable. not anymore. computers being replaced is likely to occur, however, this doesn't mean SMTC can justify sky high prices.

        SMTC has more room to go down. if fundamentals should change, this could drop further to the mid to high teens.

        long term 3-5 yrs, who knows. but for the next few months, downward pressures are likely to eat into the share price.

        short to mid term: sell

 
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