CAMD traded well over 100 times average daily volume today at 3.2 million shares versus average daily volume of 26,000. CAMD is the leader in a new technology - integrated passives devices (IPDs). Either some fund managers decided to move very aggressively or this was the initial move in a takeover.
With IPDs CAMD has been able to place dozens of resistors, capacitors and other components on a single silicon chip. Cell phones, wireless devices, PC laptops, and the coming internet appliance devices need hundreds of passives components. For example, industry studies have said cell phones will need as many as 900 passives components per cell phone. The only way to place that many components in a small space will be to combine components.
CAMD is a couple of generations ahead of the rest of the passives industry in IPDs. The rest of the passives industry is still focused on making individual components. Merrill Lynch recently recommended AVX citing their 0612 Z array, a thick film array with 2 capacitors and 2 resistors, as a breakthrough in integrated passives technology. In comparison, CAMD's 1284 has 72 components on a single thin film chip. CAMD's 1284 is already used by dozens of the major PC manufacturers and has become the standard in IPDs. Cisco also uses other CAMD IPDs in their routers.
Last quarter CAMD reported design wins for their new PAC products doubled over the previous quarter to 33 design wins. These products have grown to nearly 30% of revenues versus 0% two years ago. The Electronic Industry Association (EAI) projects the market for these integrated passives will grow 41% this year and 113% next year. The EAI says this market grew 22% in 1998. CAMD has a 32% share of this new market category.
And, CAMD has been rolling out 5 to 6 new products based on this technology each quarter. As these new PAC products pass the 50% of revenues mark, CAMD's revenues should start to reflect real growth and at better gross margins. That could happen this year.
Although CAMD is expected to show a loss for the June quarter, CAMD has the potential to grow very rapidly and be quite profitable. CAMD is going to be worth a lot more than $2 and change a couple of years from now. Eleven members of management and the CAMD board have bought 113,200 shares over the last 12 months. Something positive must be happening at CAMD. |
