Several things:
Today, FMR Corp. revealed a 10.29% stake in SMTC (in a 13G filing).
Pham- Price to sales ratio is the market cap divided by the annual revenues. I don't like this ratio, because it fails to reveal very important measures, such as profit margins and growth rate. For this reason, P/E is much better, assuming the company is not overreported earnings or playing accounting games. Actually, operating cash flow is the best measure of a company's profitability, IMNSHO. P/S is only useful if companies have similar growth rates and margins, such as MCRL and SMTC.
Leeza- Thank you for posting this comparison. This is what I've been saying for the past year! SMTC is undervalued compared with its peers. But I wouldn't hold your breath waiting for SMTC's margins to reach levels achieved by LLTC and MXIM. It's not going to happen ANYTIME soon. We could see 20% in the next 2 years, though.
I was surprised by the lack of weakness in the chip-equip stocks today. I recommend waiting for a ~20% pullback in them, before building or adding to positions.
Todd |
