I'm not bullish on SIMO really. If it doesn't get acquired, it seems like it will continue to do quite well and grow modestly and produce lost of cash, but the stock seems like it will never get a nice valuation. So....if there's no deal, I probably would be happy to own SIMO at about a 7x or 8x PE, but it's not the best tech story now.
I'm hoping the deal goes through, and I plan to move my cash proceeds into larger blue chip semis (ADI, TXN, MCHP) or smaller high growth semis. SIMO is low end high volume tech, so it's a good cash cow, but not much growth now that SSDs have penetrated PCs fairly well.
Last quarter stunk!
If the merger falls through I think SIMO will drop to low $50's, and then it depends on what they report for Q2. If similar to last quarter I'd expect it to drop to low $40's perhaps. We can expect SIMO to drop below the lowest target price we have I think, it often does. But, they will have a ton of cash (maybe $400-$450m?) so maybe they bump the dividend/
I have no idea what to expect for SIMO when the cell phone and PC doldrums end. They were rolling along at $250m per quarter last year, and now about $120m (??). I don't know what is their normalized run rate.
I left the Philippines in 2020. I'm moving to Florida tomorrow......near Jacksonville. Go MXL-SIMO deal, go! |
