Amit Chokshi_

Two Compelling 'Cash Hoard' Stocks

Why do you feel PLAY is worth $24 per share when they don't have the Apple business anymore? When it was providing the SOC chips to AAPL it could barely support itself stock wise and picking up incremental business from SanDisk and Creative Technologies won't do much to make up for that loss.

They also rely on just one type of SoC platform that's really targeted towards PMPs. They are going into the cell phone business and there are rumors about Zune picking them up since PLAY's SoC will be in SideShow but the impact of all this is extremely difficulty to quantify. I'm not sure I believe Vista is going to spawn some notebook computer explosion where laptops equipped with sideshow devices will be flying off the shelf. I don't see a lot of differentiation between what SideShow devices can do relative to the next-gen handhelds which can synch to your computer as it is. PLAY's SoC costs more and is a higher end product which is fine but I think as PLAY goes downstream into other devices they'll run up against guys like SGTL and Action Semi that can price them out.

Nonetheless, the cash balance should give you some safety but tech cos can be notorious from going through cash flow to cash burn. Also, the forward estimates are not that attractive, PLAY is really selling for at least 30x next year's EPS.