Stock Buy - CRUS @ 14.11. Briefing.com news - Chart is above 20 and 50 day SMA and good news today on Motorola contract that helps establish them in a higher margin business. Motorola is the largest set top box producer. This may not be the best entry point, so I'll take a 1/2 position here. I do NOT expect this to be a quick mover, but I have a target of $20+ which was its Aug. high. It is possible that it could reach it summer high of $26+ later this year, but who knows whether I will be holding it that long.
From Briefing:
Cirrus Logic (CRUS) 14.35 +0.34: Shares of Cirrus Logic are getting a lift this morning on the company's announcement of a notable new contract. Namely, Motorola's Broadband Communications Sector has selected Cirrus to provide wireless technology for its new EVr-8401 Enhanced TV Viewer. The Cirrus wireless networking technology, named Whitecap2, was designed to meet the home-user's wireless networking needs. For example, Whitecap2 technology incorporates important home-oriented benefits, including support for high-fidelity entertainment content such as MPEG-2 video and CD-quality audio, as well as built-in resistance from common household interferers such as microwave ovens and cordless phones. Today's contract announcement is decidedly positive for Cirrus as Motorola is the world's largest provider of set-tops. It also fits with management's longer-term strategy of refocusing the business on its higher growth/higher margin entertainment electronics business and away from its magnetic storage business. From an investment perspective, the focus on higher margin/higher growth business suggests multiple expansion is a realistic prospect going forward. Put another way, Cirrus Logic should have two drivers of intermediate-term price appreciation: 1) the improved financial dynamics of its more attractive target markets and 2) the prospect of a heftier price multiple as a consequence of its more robust business. When the economy does reaccelerate, Cirrus Logic is well positioned to benefit. It carries virtually no debt on the balance sheet and maintains a cash position of approximately $167 million. We continue to be positive on this company's longer-term outlook and continue to believe it represents an attractive long-term opportunity. -- Mike Ashbaugh, Briefing.com |
