Dave, my point is that there's no point sticking doggedly to metrics when so much of the buying and selling of certain stocks is momentum driven. (I'm not saying (one,you,I) shouldn't invest based on fundamentals, just that not all trading or stock pricing of others can be explained by fundamentals). If institutions are so smart, why in hell's name were they doing all that buying at $80/share? Fundamental analysis? And shouldn't they all be loading up, given that Sandisk blew away expectations and offered pretty positive guidance? This is semiconductors...are you suggesting all the institutions simply forgot it's a cyclical business until Sandisk reminded them yesterday? Something isn't consistent here...
But if we're going to stick to metrics...
Regarding your comment about earning a $1.25 per share. Remember in the 4th Quarter, fully diluted shares stood at 95m and they only earned 97m in licensing revenue. Going forward you are looking at less than a buck per share in royalties.
I'll admit I was using my 'back of mind calculator. On closer inspection, since guidance is for "License and royalty revenue of approximately $30 million per quarter with potential upside in the first and fourth quarters"
then we would expect $1.26+/share on a base of 95 million shares. Not miles from ~$1.25, wouldn't you agree? We can quibble to the next level: even assuming there's dilution and none of the 'potential upside," guidance is still for much more than "less than a buck per share in royalties."
[As a reference point, quickly checking the historical financials, royalties more than doubled last year, while dilution was nowhere near 100%.]
Hynix/STM and Micron will enter w/o signing a licensing agreement.
IIRC, Sandisk successfully got an injunction against Samsung for shipping infringing products (without going to trial). Given the likely legal beating both Hynix and Micron are likely to take re:Rambus, I'm not so sure they'd want to purposely infringe on yet another company's patents. (Micron is apparently already cooperating with a DOJ investigation, allegedly admitting to anti-trust violations, presumably fingering Hynix/IFX in an attempt to avoid punishment. thestreet.com
What you are doing is "speculating"...
What am I doing, exactly?
Andre
PS: In October for a class I ran a detailed cost of capital calculation and came up with just under 14% using CAPM. |
