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

To: Graham Osborn who wrote (60016)	10/26/2017 7:36:35 PM
From: Elroy	Respond to of 78744

SIMO is a small cap high tech firm, so normal valuation metrics probably aren't the best thing for it. Their revenue and EPS growth since 2009 has been fantastic, maybe 20% to 25% per year revenue growth, EPS higher than that. If you go back 10 years then you start at 2007, which make the first 2-3 years of the 10 years change the annual growth rate of the past 8 years dramatically. Anyway, SIMO does seem expensive now relative to it's history during these 8 years. That's because the past 4 quarters have been a downturn for them, but the outlook is rosey (they should come out of their own downturn starting about now), so the shares are up in anticipation of next year's results. So recent actual results are not too good, but expectations for next year's results are quite good, so the valuation looks high. But it's cheap for a semiconductor stock. That's a plus for SIMO, a $16 billion semi stock with a 21x PE multiple could acquire SIMO any day at a nice premium, and it might even be accretive for the acquirer. Any way, it's more of a growth stock than a value stock. Most tech stocks are that way. The assets are the people (the personel are ~70% engineers), something like that, so the value story isn't there.