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Strategies & Market Trends : Value Investing

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From: Elroy	5/24/2014 12:19:11 AM
	Read Replies (2) of 78717

The cheap semi stock I mentioned a while back keeps getting cheaper - SIGM. They have ~$77m in cash and a market cap of $117m now. Seems too low for a company with gross margins in the 50%-55% range and expecting to do $200m over the next four quarters. As I've said I have no idea about the strength or weakness of the company in its markets (which are quite competitive), but a $30m enterprise value for $200m in sales at 55% gross margin seems way oversold unless the company is heading toward bankruptcy. License revenue in the latest quarter was $6m, that alone seems worth the $30m enterprise value. Yesterday they got removes from an S&P small cap index so that caused the selling. Getting removed from an index is no good, but has nothing to do with the outlook for the company. I bought a bit more yesterday below $3.40, anybody going to join me in this one? It's definitely a VALUE stock!

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