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

To: Graham Osborn who wrote (58223)	10/16/2016 8:43:12 PM
From: Elroy	Respond to of 78748

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. Looking at the past ten years is going to give you a strange view of SIMO's "average" anything. In 2009 SIMO traded as low as net cash per share ($2 cash per share, $2 share price in 2009, they've never had any debt that I know of). At that point all of tech was in the dumps, the market was in the dumps, and SIMO was breaking even each quarter. Since then revenues have done not much other than go up, so has operating profits, so has cash per share, and so has the share price. SO in 2009 I'm sure all your valuation metrics would be super low, nowadays they're probably closer to "normal", but, I think, still pretty low for a semiconductor stock, and quite low relative to the growth rate. 25% in 2014, 25% in 2015 and around 50% in 2016. Those numbers are probably better than any large cap semi stock, and better than 90% of small cap semi stocks. But SIMO's valuation numbers (I think) are not in the high end when compared to the universe of semi stocks. It seems like a great stock to buy for a bounce around half tangible book I don't even look at book value when buying tech stocks. SIMO's tangible book is probably, what, in the single digits? Maybe $14? How in the world are you going to buy it for half of that? Current share price is $48, and the revenue growth outlook is strong. It's not going below $20 unless disaster strikes. In small cap tech disaster can strike - sure, why not - but I doubt it. And yes, I would never call SIMO a "value" stock. I was a "value" stock back in 2009, the share price and the case position were almost the same, that about as "value" as you can get. But it has grown very rapidly since then, so it's now a very reasonably priced growth stock, but it's not one that I would use value metrics like Price to Book to decide whether to buy or sell.