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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Elroy who wrote (58208)	10/15/2016 10:52:35 AM
From: bruwin	Read Replies (1) \| Respond to of 78745

SIMO has shown itself to be a good growth stock, although Revenue has flattened out a bit in the last 3 months. Going forward, I guess a lot may depend on the advancements made by others in the special line that SIMO is in and how that affects SIMO's market share. Here's SIMO's last set of Quarterlies where I used average percentage increases in top line Revenue and bottom line Net Income to do a future share price prediction. I assumed Revenue increases of about 21.5% and Net Income increases of about 26%. That gave a predicted EPS of $3.82 per share. Based on the last 3 years of P/E history I used a P/E of 20 in order to predict a future share price of about $3.82 x 20 = ~$76 .... So, based on a current SIMO share price of about $48, there could be a Capital Gain in 6 months time of about $((76 - 48)/48) = 58%.

To: Elroy who wrote (58208)	10/15/2016 10:56:32 AM
From: E_K_S	Read Replies (2) \| Respond to of 78745

Yes SSD is the new mainstream HD. I have replaced all of my HD's to SSD and the biggest benefit is it provides a faster boot up. Even now it seems slow but definitely an improvement over the old generation HD. How much is proprietary technology vs commodity and do you see their margins shrinking? I like the sector a lot now and have been accumulating shares in CY for a similar reason. They do specialty chip (including memory) w/ markets targeted to the auto sector and manufacturing/robot controller chips. If SIMO and/or CY is first to a niche market w/ their products, they can maintain their high margins. The sector is growing and these manufactures produce products that make their devices more efficient. Neither of the companies are GN candidate value stocks but have good assets that generate large EBITDA, SIMO in particular when you compare market caps. CY turned down a Private Equity offer rumored to be between $15-$17 per share. Recent loss is/was due to their latest acquisition and are one time merger related expenses and job downsizing. Therefore, the quality of their earnings looking forward should be better along w/ high sustainable margins. The value proposition is that these companies are GARP stocks (Growth At a Reasonable Price). As long as their products do not 'morph' into commodity widgets w/ decreasing margins, each company can grow their revenues w/ little to no significant added marginal production costs, generating higher quality EPS. This is accomplished by selling their specialized components into niche specialty devices w/ little to no competition. SIMO may have a bit more competition but they probably serve a much larger growing market(s) than CY. I like other companies in this sector but many are at/near their 52wk highs including the semiconductor test and wafer manufacturers; AMAT, LRCX, KLAC and even NIMO. I doubled my position in CY last week but my position is still small. Good Investing EKS

To: Elroy who wrote (58208)	10/16/2016 1:18:31 PM
From: Graham Osborn	Read Replies (1) \| Respond to of 78745

SIMO trades at the high end of its historic range (last 10 years) on EV/ Rev, EV/ EBITDA, and P/ Tb. It traded at half Tb after the recession. It seems like a great stock to buy for a bounce around half tangible book, so I'll add it to my "recession wish list." It may get there quicker than expected if they continuing growing their book. When I buy a growth stock I like to see it steadily growing rev and tbook at a relatively constant multiple, which suggests room for price and maybe even some multiple expansion. Thanks for the insights on what seems like a nice company.