TechnicalTraderMike

Schering Now - Cramer's Lightning Round (4/29/08)

I agree w/ the comments about Cramer below. As for LSI I think it is a great buy now @ $6.25. Most the analysts have increased their 2008 earnings forecast over the last few day (since LSI announced their earnings on 4/23) but it is still at a relatively low P/E.

For Q4'07 they reported $ 0.13 beating the analysts' consensus of .07 by .06. For Q1'08 they reported $0.10 beating the consensus of .07 by .03. LSI also raised their guidance for Q2'08 to a range of .08 to .12. All the above numbers are non-GAAP.

The analysts' consensus for 2008 non-GAAP is now at $.42 giving it a P/E of 14.89. Normally it should trade in the 18 to 22 range which means it should really be in the $7.60 to $9.20. I think they will deliver $0.50 for 2008 as they have a history of beating the analysts consensus. That should place them at a solid $9 given a reasonable P/E multiple.

Fundamentally they appear to have made the right choices in focusing their product lines on storage & networking and the acquisitions have been smart ones.