Well, I just became bookmark#200, so there has been just a little slippage over the past 7 months. <g>
But you are right-on with your SunPower theory, according to Lehman and Herb Greenberg:
Cypress: Backdoor play on Sunpower
By Herb Greenberg, MarketWatch
Last Update: 7:37 PM ET Jan. 4, 2006
SAN DIEGO (MarketWatch) -- Getting the new year off on a high note: Cypress Semiconductor is getting a boost after a report from Lehman Brothers says it's worth $19 as a play on recently IPO'd Sunpower, a solar-cell maker majority owned by Cypress.
I had a similar take two weeks ago in my subscription newsletter, Herb Greenberg's RealityCheck, where Cypress is green-flagged. The bullish argument outlined in the newsletter, in retrospect (and admittedly) in a somewhat pre-holiday clunky manner by yours truly, put Cypress at closer to $23.
Lehman notes that Cypress is trading below its historical levels of 1.5 to 2-times sales. It's worse than that: As I noted in RealityCheck, subtracting its cash, the semiconductor "stub" of Cypress trades at less than one-times sales.
Another way of looking at it: There's currently more than $10 of Sunpower in every Cypress share, while the semiconductor stub sports a value at somewhere between $4 and $5. Based on historical valuations, however, the semiconductor operation should be valued at more like $14 - or just below where all of Cypress, including its Sunpower stake, currently trades.
Put it all together and you get a sharply higher price and a chance to get Sunpower for what arguably is the equivalent of free.
marketwatch.com{FA86978F-4949-441D-9F55-8E6050086CA5}&siteid=bigcharts |
