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Four analysts and top management from sixty-one sector firms examine the Roth Capital Partners 14th Annual Growth Stock Conference in this special 222-page issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info493.htm

TWST: What are you doing as far as your methodologies and your assessments for valuations for these companies?

Mr. Kang: Valuation-wise, we really haven’t changed a whole lot. Even in the go-go days of 1999-2000, we were using price to sales because at that time, this sector was technically classified as a hyper-growth industry. Obviously it’s not hyper-growth anymore, but, at that time, when we used the price to sales matrix it was much higher — 50 to 60 times revenue. Now the optical component vendors are going for anywhere from 8 to 12 times. Because of a lack of earnings, we are back to this price to sales metric and obviously on a much lower matrix; however, it is still price to sales at this point.

TWST: But that’s actually a positive if the recovery does occur because it hasn’t been factored in by the market.

Mr. Kang: Absolutely.

TWST: What about the other three companies — Aeroflex (Nasdaq:ARXX) and Newport and Digital — the differentiation of big players versus these other players?

Mr. Kang: Right. These are somewhat different. None of them are classified as optical component companies. Aeroflex does sell optical components, but it’s a much more diversified company. Right now about 50% comes from the military side. They sell microelectronic products as well as some capital equipment, test measurement products to Boeing, Raytheon, Lockheed, General Dynamics and Northrop. Right now Aeroflex is a buy, Newport is a buy, and Digital Lightwave is a neutral. Of those three, Aeroflex is my top pick as obviously, with the 9/11 events, the military certainly is receiving a lot of attention from President Bush’s administration as well as from investors. If you look at all the December quarter results from the top military companies like Boeing, Raytheon and Lockheed — they all grew very strong sequentially from the September quarter. Aeroflex supplies products to these top military vendors. That’s why we like Aeroflex, because they should benefit from President Bush’s emphasis on defense programs. Plus, you have potential recovery in the fiber optics and semiconductor.

TWST: How are you seeing valuations for these?

Mr. Kang: Digital Lightwave is pretty much a pure optical player, so we just use the same matrix. As far as Newport and Aeroflex, we do a bit of sum of the parts, but then obviously some of the parts we do price to sales, but with a different matrix.

TWST: You mean there actually is an area where someone could say “buy and hold”?

Mr. Kang: This would be that area right here. Because expectations are low, we have some reasons to believe the industry will recover. Even Alcatel (NYSE:ALA) and Nortel are going to be down this quarter sequentiall;, they think this will be the bottom. Actually Lucent is calling for December to be the bottom, so there are some companies giving some optimistic guidance. The problem is that nobody believes them yet, so basically they have to come out and show the results rather than just talk about it.

TWST: It’s going to be “show-me” time?

Mr. Kang: Yes, it is “show-me” time, absolutely. But if they do, then you should not be chasing the stock; you should be in already because the glass is half full.

This special conference issue includes:

1) Outlook for Biotechnology - In an in-depth (3,100 words) Analyst Interview, Fariba F. Ghodsian, Managing Director and Director of Healthcare Research at Roth Capital Partners, examines the outlook for the sector and shares specific stock recommendations.

2) Outlook for Consumer Stocks - In an in-depth (2,900 words) Analyst Interview, Anton Brenner, Senior Vice President of Research at Roth Capital Partners, examines the outlook for the sector and shares specific stock recommendations.

3) Wireless Technology & Software - In an in-depth (2,200 words) Analyst Interview, Daniel B. Campbell II, Senior Vice President of Research at Roth Capital Partners, examines the outlook for the sector and shares specific stock recommendations.

4) Optical Networking & Optical Components - In an in-depth (3,100 words) Analyst Interview, David Kang, Research Analyst covering fiber optic communications groups at Roth Capital Partners, examines the outlook for the sector and shares specific stock recommendations.

5) CEO interviews (average 2,500 words). Top management of sixty-one sector firms examine the outlook for their firm and the sector.