Hi Jeff,
Thanks for the discussion.
Keep in mind, I'm not upset with Semtech, and I think they are fine. Even 6% sequential sales growth comes out to 26% on an annual basis. This is quite good, and if the stock followed suit, one would double his/her investment every five years or so. This has become one of those investments that I consider a keeper, and a core holding. I plead with my friends and family to buy shares.
However, let me play devil's advocate here. I can't help but notice ADI had sequential sales growth of 21% and Micrel came in with 13%. Semtech had 55% gross margin, an improvement, and an excellent performance, but ADI was over 56%. Sure Semtech is a great company, and sure they have great engineers, and they put out excellent new products on a very regular basis now. The management is platinum. But in the end, isn't it the financials that matter to the investor. The customer might have a different opinion.
Question: What does it mean that ADI and Micrel had 2-3 times the revenue growth over the last quarter? Is Semtech momentarily going to overtake them and leave them in the dust? Or are they falling behind the competition?
Say I was not already a Semtech share holder, and was looking at these three as potential new investments. Wouldn't a fair, objective minded individual be drawn to the others based on the recent financial performance?
Please bear with me here. I'm afraid someone is going to come back with "just short the stock, shut up, go away, or get on board". I'm simply trying to understand if Semtech is lagging our competition, and if the other guys are currently the smarter investment. One should reassess investments periodically, even if no action is taken in the end. And I'm not going to act out of reflex. I'm going to look at all the things you suggested, as a smart investor should, and hopefully I'll conclude I should stay put.
I welcome any and all discussion of this topic.
Thanks again Jeff.
SPB |
