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StockTradersPress.com
A Corporate Communications Corp. Publication ---- All Rights Reserved
Long-Term Report		February 18, 2003

STRONG BUY
Silicon Graphics (NYSE) SGI	$ 1.28
52-week range	$0.56-$4.85
Market Cap	$226.3M
Shares Outstanding	198.5M
Book Value	-$0.53
Price/Book	N/A
Average Daily Vol.	884,000
Target Price	$5.00
Target Percentage	290%


Silicon Graphics is a leading provider of high-performance solutions for complex data management, video and visualization applications. The company’s products deliver advanced 3-D graphics and computing capabilities for engineering and creative professionals.

We are recommending Silicon Graphics for the following reasons:

The Company has completed a turnaround of its business over the past 18 months under the new management. This is especially true with regard to Silicon’s product offerings and its research and development. On 2/18/03 the company announced it received a contract for $26 million from the U.S. Department of Defense. Additional revenue is expected from the contract over the next several years. From a financial viewpoint, the company’s position has strengthened considerably whereby Standard & Poor’s recently upgraded the company’s bond rating. The Company’s video and visualization products have gained increasing acceptance outside the scientific community. A major customer over the recent past has been the motion picture industry. The need for high-resolution graphics has dramatically increased as the industry employs more “special effects” and the medium is moving towards digitalization. While corporate IT spending has been slow, the company’s Government business has been robust. This sector represents 30%-40% of Silicon Graphic’s business. SGI has recently received orders from the U.S. Government for its Early Warning System. New orders have been secured from India, Malaysia, and Sweden, and new domestic orders have been received from Ford Motor Company, Lockheed Martin, John Deere, and the National Cancer Institute. Currently, the company has gross revenues of $1.3 billion and we estimate earnings of 12 cents per share for the fiscal year ending 6/30/03. SGI has cash of $1.09 per share.

UPDATE: King Pharmaceutical (KG) announced its most recent financial results on 2/18/03. The company reported quarterly earnings of $0.41 per share on an operating basis, exceeding the consensus estimated by $0.02 per share. The company did take a one-time charge but we continue to like the stock at $15 and believe our target price of $21 will be achieved.

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