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Vivid Profits For A Video Whiz

Inside Wall Street


Tseng Labs, a small manufacturer of chips that enhance video graphics in personal computers, is fast gaining the respect of major computer makers--and investors. Its stock, which traded as low as 3 late last year, hit a high of 10 in April before easing back to 8 1/4 recently. After that meteoric rise, even the company's most loyal fans are wondering if the stock has reached its peak.

No way, say some investors who have been accumulating shares. They figure that earnings at Tseng Labs will continue to rocket. Their confidence is buttressed by years of record profits: Earnings soared 134% in 1990's final quarter and posted a rise of 135% in 1991's first quarter, to 16~ a share from 7~ a year ago.

Ed Antoian of Delaware Management sees Tseng's earnings reaching 60~ a share this year, vs. last year's 33~, with the stock hitting at least 15. He expects 1992 net of $1 a share. Karen Payne, an analyst at Wheat First Securities/Butcher & Singer, says Tseng is "a pure play in the burgeoning PC graphics market," and she, too, expects the stock to climb.

A big part of the company's impressive earnings performance is the popularity of its ET4000 chip, which Payne says has become the industry standard for IBM-compatible PCs. Tseng supplies ET4000 chips to such PC makers as Samsung, Siemens, CompuAdd, and Everex. And fresh optimism is emerging on anticipation of Tseng's new ET4000LX chip, which is expected to give the company entree into the emerging laptop/notebook market. Mike Howe, an analyst at Pennsylvania Merchant Group, thinks the ET4000LX will fuel much of Tseng's growth in 1992.GENE G. MARCIAL

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