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Piper Jaffray Companies Message Board

  • gm_veteran gm_veteran Jun 5, 2009 8:15 AM Flag

    LTX way undervalued! P/E<3!

    LTXC earning number analysis

    LTXC:
    Current stock price $0.58, 128M O/S, Stockholders Equity (Assets minus Liabilities) = $117M. (not bad for a penny stock!)
    Projected sales year end Jul 2010 $164M (very conservative) = eps of $.06 (not minus .44 like the old estimate based on the old break even numbers they used)
    That is only about a 21% increase in sales year over year, they could be much higher than that.
    PE = $0.58/.06 = 10 going out 1 year! Looks a little small compare to the others...

    Now that projected sales figure may actually be 50% year over year (not 21%) - if we assume a comparable growth rate as our competitors.
    LTX proved each company fell by about the same percentage rate during the downturn earlier. And LTX has retained all CMOS/LTX customers - and is adding 3 or 4 in the next 2 Q's. So why aren't we awarded the same growth rate going back up?

    That new growth rate would give us $201 in sales minus $156M (4x39M break even point) - or $45M Profit. That would equal .35 eps or a PE of 1.6 looking out a year at the current $0.58 stock price! WTF, PE less than 2 ???

    But lets cut that eps in half just so nobody gets too excited, .17 eps or a PE of only 3.4!
    To be fair the assigned PE should be around 35 once the growth rate equals 35% (coming off the bottom of a huge down cycle), so that would equal a stock price of .17 eps X 35 = $5.95! (The PE's of the other two companies are 150 and 293!)

    Competitors:
    VRGY: Price target 1 yr. $14.67.
    Current stock price $12, 58M O/S, Stockholders Equity (Assets minus Liabilities) = $489M.
    Projected sales year end Oct 2010 $485M = eps of $0 (break even). That is about a 53% increase in sales year over year.
    But lets add $3M and assume they get profitable by then.
    EPS = $3M/58M(o/s) = .05
    PE = $12/.05 = 240 going out 1 year! Or 293 using the current projected stock price of $14.67!

    TER: Price target 1 yr. $7.30
    Current stock price $7.48, 173M O/S, Stockholders Equity (Assets minus Liabilities) = $706M.
    Projected sales year end Dec 2010 $825M = eps of $.05, that is about a 47% increase in sales year over year.
    PE = $7.48/.05 = 150 going out 1 year!

    But lets go back to the original (old) sales projection of only $164M, eps .06, 21% growth rate = .06 eps X 21 = projected stock price of $1.26, not .75! What is Citi thinking? Last Q's sales and margins? FKN dimwit! LTX is blowing away those figures now!
    The new analyst estimates should look much better once they file the 10Q and they are updated.
    The press has completely ignored (so far) the fact that LTX margins are WAY lower going forward and that our growth rate is keeping pace with the sector.

    Buying more as semiconductor industry recovery moving on!
    The train is leaving station!!!!!

 
PJC
54.17-0.41(-0.75%)Oct 30 4:03 PMEDT

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