Too much of an "easy short"? I did a little more research on this co.; here's some important items to consider:
1. As far as I can tell, Vitesse has no direct GaAs Asian competition (which could cause price pressure). In fact, VTSS is kind of unique in this respect...for GaAs designs tailored to very specific high-bandwidth applications.
2. There is some weak GaAs domestic competition (Triquint)...but even there, the market overlap between Vitesse and Triquint isn't large. Further, Triquint gets a lot of revenues from the "dreaded" wireless market, which Vitesse just doesn't have the same exposure to.
3. It appears that Vitesse is driven to a large degree by domestic demand; i.e., by the needs for the most advanced, high-speed networking designs. See the Gilder article for more info...
4. With the very recent announcement of "cheap high-bandwidth Internet-based long distance telecom" by at least one co., I forsee a rush to certain high-speed networking technologies which could benefit VTSS immensely. That is, AT&T et. al. will have to delve into this area too, quickly. No doubt about it.
5. There is at least one recent research note on a specialty semiconductor company which sells to Japan...this report shows a BOOST in orders. No doubt, the end-product using said specialty component is consumed in the US or Europe. Figure, cheap assembly in Japan due to weak Yen!
...SO...VTSS in a very specialized market,
not bound to wireless market,
strong domestic demand,
new trend which could boost sales...
...stock down 40 percent plus from highs based on speculation? |
