SMTC makes stuff that goes into other stuff that is seasonal in nature. For example, purchases of computers, cell phones, and other such electronics are typically greatest around Christmas.
Since SMTC is upstream, they sell a majority of their stuff Q2 through Q4, so it can be integrated into all that stuff that will be sold over Christmas.
Q1 is historically the slowest quarter of the year, as the retail industry slows down after the holiday season..
This in a nutshell is what you are looking at, when you see minimal sequential growth from Q4FY00 and Q1FY01 revenue. You're looking at maxed out credit cards, burned out shoppers, cell-phone equipped happy campers, and several new web surfers (clogging up all that precious bandwidth).
So, a couple questions for you now if I may.
1. What do you think can be inferred from the fact SMTC posted very strong Q1 numbers, which is typically their slowest quarter? Is it possible new products are coming online to supplement existing product families, adding additional revenue streams, and tapping new markets?
2. What do you think this chart is telling us?
siliconinvestor.com
Do you think it might be telling us Mr. Poe (and EVERY darn SMTC employee) just has things figured out better than most others? Are we looking at the past, or ... are we looking at a projection into the future? Is a management team that has implemented steps necessary to achieve their vision better than almost any other company very much likely to suddenly go stupid?
3. Is new product development important to earnings growth? In that respect, what do you think about SMTC's R&D efforts, their propensity to hire only the best engineers (ask pham for specifics on that one), and their uncanny ability to introduce a bevy of new design wins quarter after quarter after quarter?
All in good fun, but think about it for a bit. You can go as far back as you want in the history of this company, as long as Mr. Poe was CEO, you'll find nothing but brilliance.
Frankly, my advice would be to simply wait for a potential correction mid-June, then buy some of this stuff, and forget about it. I mean, look at the chart! I know, I know, the past does not predict the future ... ahem, I hate to interrupt the process, but as long as Mr. Poe is CEO of SMTC that is exactly what is going to happen.
In summary:
BUY : after mid-June
SELL : the split-second Mr. Poe announced leaving SMTC
Now, that my friend is sage advice, and I'd like to ask fellow longtime SMTC investors to tell dude exactly how right it is. Nighty night :o)
Regards, JB |
