On a different note, I probably haven't brought it up here for a while since it doesn't seem to me to be a "value" stock, but if low PE high growth stocks count as "value", anyone looking for some juice might want to have a look at the most popular stock on Silicon Investor = that's right, SIMO! It has beat and raised guidance each quarter in 2016, and yet, the shares have fallen about 15% from their recent all time high for, well, not much reason.
What do they do? They make semiconductors, specifically controllers for NAND flash memory. That's the memory in cell phones/tablets (called eMMC), and increasingly the memory for PC's and enterprise hardware (called SSDs).
Quick and dirty financials - they're gorgeous! SIMO grew revenues ~25% in 2014, grew them again 25% in 2015, and this year are expected to grow revenues more than 50%. Next year in 2017 they'll probably grow revenues again, but the growth rate is your guess. The big revenue driver at the moment is the transition in PCs and enterprise hardware from spinning disk (old tech) to NAND-solid state drives (new tech). If you turn on a Mac PC it's automatically on, it doesn't need to boot up like a Windows PC. That's the SSD technology (which is automatically on) versus the spinning disk technology (where the disk needs to start spinning and put some software into local memory. Right now about 33% of PCs are SSD, with that percentage expected to go to 100% in a few years. SIMO's controllers go in about 35% of the SSD market, so as SSDs grow, so should SIMO's sales.
Competitors in SSD controllers include Marvell and Phison. In eMMC there is no meaningful merchant competitors. SIMO's main customers are the six NAND memory makers - Intel, Micron, Western Digital (Sandisk), SK Hynix, Toshiba and Samsung. Samsung is the largest NAND maker, but also makes its own controllers for most applications. SIMO is big with SK Hynix, Intel, Micron and WDC/Sandisk.
Cash is about $6 per share, no debt.
EPS for 2017 is so far unknown, but I'm going to guess $4.00 should be pretty easy. SIMO will do about $1.05 in Q3 2016 on revenues of about $158m. So with a share price of about $48, you're paying 10.5x 2017 EPS + $6 cash for a stock that has the revenue growth history (25%, 25% and 50%) discussed earlier.
It's got to be amongst the fastest growing stocks in the semiconductor industry, and 10.5x ex-cash is amongst the lowest valuations in the semiconductor industry. So, perhaps that's a value stock, up to you.
They don't have anything to do with lightbulbs. |
