Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (20101)	10/6/2017 1:53:54 AM
From: Elroy	1 Recommendation Recommended By The Ox Read Replies (1) \| Respond to of 33421

Why did SIMO earn $3.64 last year and yet they will make $2.70-2.90eps this year? Last year SIMO grew revenues about 55% year on year as NAND production was excessive (at least in H1 2016), and NAND prices plunged. Since H2 2016 NAND supply has been limited due to the transition from 2D planar NAND to 3D NAND. This transition and supply constraint made it harder for SIMO's customers to get cheap NAND. SIMO sells controllers that are necessary for each device that uses NAND. Limited NAND availability = limited controller requirements. So.....this year has been sort of a dud, I think revenues are expected to decline 10% or so from last year. Not sure that this qualifies for earnings faster than the market..... Yes, SIMO's earnings in 2017 are slower than the market. SIMO as an investment in 2017 has been a dud, but not too awful. Share price is about flat with this time last year. By revenue and EPS growth above the market rates, I meant SIMO from 2009 to 2016 (or to 2017). In 2009 SIMO had sales of $88 million, and last year they were, not exactly sure, $560 million? That's faster than the market. And the faster than the market thing should pick up again, beginning next quarter, so ..... since stocks supposedly look forward, that's what I mean SIMO will grow faster than the market.....from today! SIMO is a serious cause for concern going forward. Going forward the NAND supply is expected to increase in 2018 to exceed NAND demand. That's because NAND makers are over the peak of the transition from 2D to 3D NAND, so the production ramps are coming,. probably going on right at this moment, and they'll continue to seriously ramp production for at least the next 6 quarters. More NAND = cheaper NAND = more adoption, and every device needs a controller. So the previous 4 quarters were SIMO climbing the mountain, and now it's time for the SIMO train to start rolling down the other side of the mountain. SIMO's revenues are highly likely to grow sequentially for each of the next 5 quarters (starting in Q4 2017). That's usually good for small cap tech stocks, and it's especially good for small cap tech stocks that have just put in a low growth crappy 4 quarters in a row, no matter what their current valuation. But yeah, I only go on and on about this because......no one on SI seems to care much about SIMO, despite the stock having gone from $1.90 in 2009 to about $50 today. So, sorry, I won't bring it up again, maybe....