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Vishay Intertechnology Inc. Message Board

  • RICKEVANS39 RICKEVANS39 Mar 4, 2005 4:35 PM Flag

    The timing may be right

    Siliconix has a poor Q4. Gross margins were down to 23% not 30. Book to Bill is only .79. Asia distributors still have too much inventory which will take most of Q1 to flush out. So Q1 should be slow as well. Capacity utilization is only 60-65%. Price pressure continues with declines of 5% last Q. The decision to put in a 8 inch fab in Germany will be costly and makes no sense to me when 12" gives twice the capacity and is state of the art and Germany is a high cost place.

    All in all I am sure the investment bankers are on board with their valuation opinions. Also I think Siliconix management is on board as they will need VSH deep pocket for their Fab plans.

    China is building 6- 12inch fabs. Look at the releases by AMAT. Running these fabs 24-7 with double the capacity of a 8" fab means a lot of chips. Hopefully they will be memory or processor types but still as foundrys the costs for power management Siliconix chips would go way down.

    All in all, I would jump at this deal if I owned Siliconix or instead sell my stock right now.

    VSH is in much better position to recover then KEM or AVX in my opinion because of their broad product line especially resistors and transducers both with solid profits.

    One problem , I see is something called E-Auctions. Instead of using RFQs- many customers are putting out their puchases on E-Auctions . I don't know for sure how it works but can't be good for suppliers, who I think bid against each other to get the business or the internet. More price pressure.

    Can VSH recover? You would think so but problem is not demand which is normal but too much supply in everything so you end up profitless. Same with EMS area in my opinion.

    Damn, I wish I had not bought this stock.

    Rick

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    • please enlighten me. I bought VSH a year ago off a recomendation. so far I am down a good bit. Seems VSH shareholders are buying into a good company. So why did they go up and us down? What am I missing?

      • 1 Reply to benmufffin
      • I think it could be some arbitrage plus acquirer usually goes down- paying a premium using stock causing dilution. Right now based on current results and expected Q1 results adding the income/assets of the 20% not owned by VSH to results would not make this accretive based on extra 15 mill shares to be issued. Hope is that Siliconix will turn around in Q2 and all will be well and VSH would have to pay more later. But hard to call as VSH stock could be higher in Q2 also. Anyway better to buy when things are bad.
        Rick

    • good post and I think you are dead on.

      An old school of investing philosophy is that if you are thinking of selling a part of your position, then the time may be ripe to sell all. (okay I am doing a lousy paraphrase job).
      Wished I would have sold all a few years ago. You don't have to sell at the top(or buy at the bottom) to be a winner. Waiting out a down industry that pays divds is one thing...this beast is another.
      Now where is my beer to cry into....

 
VSH
14.24-0.15(-1.04%)Feb 27 4:02 PMEST

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