| | | I remember couple month ago I argued about SIMO's bad fundamentals(RO-IC/E/A, margins and other stuff), now when I'm taking a look... doesn't it simply due to compounded R&D expenses?
217.82 <-
| 174.36 <-
| 188.53 <- | 164.29 <- | 121.78 |
The fact that their revenue cyclically decreased over last 4 years, but designings costs of new controllers stayed the same -> answers my questions about "why is it so bad?"
SIMO doesn't carry debt, maintains relatively good cash balance, increased it's shareholders equity consistently and launched new SOTA controller
Consider that reversion to the mean(contrarian approach) is a terrible strategy in industries with possibilities of paradigm shift(technological change), SIMO is an exception as
- Small cap niche leader
- Trades with discount
- Passed the painful phase of intense investment and now, as Elroy kindly reminds us, ramps up its production
- Provides controllers which aligns/ahead with innovations, keeping up with the industry (quickly adopted multi-layer and QLC NANDS, i.e developed appropriate controllers)
After revenue will ramp up, ratios will increase to higher levels and stock price will appreciates accordingly. I suppose 52-53 $ is relatively good point-of-entry
I am finally jumped into your boat, will see what happen with SIMO and our projections |
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