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To: Elroy who wrote (3398)	5/2/2014 12:00:48 AM
From: The Ox	1 Recommendation Recommended By Robert O Respond to of 8239

I don't follow SIGM closely and have no idea how competitive they are in their product's markets. I do know that TVs and Set top Box semis/components can be a relatively low margin commodity and that may be SIGM's Achilles' heal? I have glanced at their financials a couple of times and each time I come away with the obvious view that they aren't making any money. Once that bridge is crossed, I next look at their net assets divided by the number of shares outstanding, which gets us to the current stock price of $3.75. So at best the company is near fair value but for a company that's been around as long as they have and yet they still haven't found a way to generate earnings, well, that's a big red flag for me....on a trailing basis. With the latest earnings miss and guidance, we can see why the stock's been dropping. The one analyst who follows the company pushed out the possibility for profitability another year, from FY15 to FY16 after this latest report. So we have to ask ourselves: Is it that they can't create enough sales or is it that they can't make money off the sales they already have? You mentioned the gross margins but they alone can't make a company profitable. It's the net margin, EPS that will decide if it's a company worth considering. They've had many years to produce them and they haven't yet. Too many companies are run for the benefit of insiders and also for their customers but they aren't really run to benefit their shareholders. IMO, KOPN is a perfect example of this as it's been run by the same guy (Dr. Fan) for well over 20 years but other than a blip or 2 on the chart, the stock is not really something you'd want to have in your portfolio. Again, I don't know enough about SIGM's product lines or potential future to try and guess whether or not they will have created a new ability to generate earnings by next year. From what I can gather, they just pushed that out at least for another year and a half. With this in mind, it's probably wise to look at companies that are proving themselves vs. one that simply hasn't shown the ability to create earnings. That's not to say don't watch or follow the company. If you think there is some potential there, then it should (eventually) start showing up in their earnings reports and analyst estimates. Right now, I just don't see it.....