SWK. Started investing in this blue chip company with a PE of 14, low debt, decent growth expected, and stock price at a one year low. market leader.
What do they do? Doesn't that have anything to do with your investment thesis?
What growth is expected?
Why is the stock at a one year low if they are the market leader (in whatever they do)?
Can SWK win in the "lets compare" investment game?
SIMO is the merchant market leader in NAND flash micro controllers. NAND flash controllers are ubiquitous and necessary, Billions of units are used in electronic devices each year. There's no alternative product on any horizon, so .... this product isn't going away; rather, the number of units sold are growing each year.
Awesome 2022 revenue growth of 20%-30% is forecast, and most investors expect SIMO to do better than 30% revenue growth in 2022.
SIMO's revenues grew 18% in 2020 and 70% (!!) in 2021.
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I had a look, and SWK grew sales 17% last year, and you say it trades at 14x. So SIMO grew sales 70% last year, and trades at 8x. SIMO is a much better investment choice than SWK, just based on the financial numbers.
So.....the numbers say buy SIMO rather than SWK. Which brings me back to the original questions - what does SWK do and why is it at a one year low if its a market leader?
SIMO has no debt.
SIMO's PE is about 8x, maybe 7x after you deduct their $12 cash per share from the (very low) $72 share price.
Is SWK a better investment today than SIMO? |
