Here's a semi small cap stock that I've had on a list forever, not sure why, and it has finally gotten me to pay attention because it's so damn cheap - SIGM.
They make semi related to set top boxes, TVs, they have some license revenue and another product area or two. I think their revenues tend to be seasonally lumpy with the TV build (??) which is Q2 and Q3 for them - not exacty sure on that.
For the past two years they've restructured and downsized the company as revenues collapsed, again not really sure why.
So the valuation - they have $89m cash, no debt, and a market cap of $145m. They are forecasting sales of $200m over the next four quarters, $35m-$38m in the upcoming quarter (so the year is back end loaded), expenses of about $105m. Their gross margins are in the 55% range, but includes some high margin licensing revenue which may or may not continue.
So....the enterprise value is about $55 million, which is cheap for a company with 55% gross margins and sales of $200m. I don't know how likely it is that they deliver their guidance over the next four quarters, but I'm watching it this quarter to see how the report goes. If the next Q report is a bit light, or there is a summer sell off, it seems the stock may get really close to the cash per share level. At that point if you can convince yourself sales will stabilize or increase it would seem a very attractive buy.
I don't know a whole lot about the products of the company, but would love to hear any other folks opinions. Is it a value trap, or a bargain? |
