VITESSE STOCK HITS NEW HIGH.

Byline: Dave McNary Daily News Staff Writer

Shareholders of telecommunications specialist Vitesse Semiconductor Corp. have enjoyed a two-month run-up that has seen shares more than double, and analysts predict continued strong growth for the company and its stock.

Shares of Camarillo-based Vitesse hit an all-time high Thursday, when they jumped $4.34375 to $41.6975, representing a gain of nearly 12 percent and the company's first close above $40. Shares hit $46.375 at one point and volume topped 6.05 million, the heaviest trading in nearly two years.

On Friday, shares set another record with a gain of 56.25 cents to $42.25.

``Vitesse has a very defensible franchise,'' said Shekhar Wadekar, an analyst with Raymond James & Associates who has a ``buy'' rating on the stock. ``They are one of only a handful of companies that can deliver key high-frequency solutions to the telecom market.''

Analyst Clark Westmont of Nationsbanc Montgomery Securities pointed out that demand has been soaring for products enabling high-speed transfer of massive amounts of data over networks.

``Vitesse is very well-positioned at a time we're seeing fast-growing markets for broad-band data products,'' said Westmont, who also has a ``buy'' rating for the stock.

Customers for Vitesse's high-speed chips include such telecommunications network equipment heavyweights as Lucent Technologies, Cisco Systems, 3Com and Alcatel, along with cellular phone maker Ericsson AB.

The company saw Wall Street hammer its stock in early fall along with the rest of the computer sector amid concerns that slowing economies would cool product demand.

Vitesse shares hit a 1998 low of $18.0625 on Oct. 5 but have sizzled since then. The stock has received eight ``buy'' recommendations from analysts since Oct. 15, when it reported profits of $16.5 million, or 21 cents a share, for its fourth quarter ended Sept. 30, up 65 percent over the 1997 quarter, on a 75 percent gain in revenues to $54.1 million.

The next day, shares jumped $4 to $28.4375, and Prudential Securities analyst Hans Mosesmann issued a price target of $45 with the brokerage's ``single best idea'' designation.

``Vitesse is a leader in its markets with a strong growth rate and a big backlog,'' said analyst David Wong of Needham & Co., who has a ``strong buy'' rating and a 12-month price target of $53.

Shares of other chip makers rose Thursday and Friday on optimism that they will see improved sales and reduced costs. Altera rose $1.3125 on Thursday and matched that gain Friday to close at $55.6975 after Mosesmann raised his target to $65 from $50, citing strong demand for chips used in networking devices and optimism for sales in the first and second quarters.

Memory-chip maker Micron rose 62.5 cents Thursday and surged $3.75 Friday to $50.125; Texas Instruments Inc. gained $2.375 and $1.75 to close at $82.875; Analog Devices Inc. gained $3.125 and 93.75 cents to $28.1875; and LSI Logic Corp. rose $1.50 and 93.75 cents to $20. LSI shares have almost doubled since touching a 52-week low of $10.50 on Oct. 9.