Tuesday, April 03, 2007

Calls of Note Part 3

- CIBC reiterates their Sector Outperformer rating & $25 target on Trident Micro (NASDAQ:TRID), in response to recent share pressure, driven by backtracking, yet still defiant shorts. The TRID rant-du- jour is HiDTV 2H08 ASPs will decline into the low teens. The irony is TRID's CY08 guidance & firm's estimates are precisely predicated on this occurrence. As such, the firm cannot understand the big fuss around ASPs.

HiDTV design activity for CY08 has commenced, & they have independently confirmed Samsung, Sharp, & Philips will be anchor high-volume adopters. Firm's Sony contact indicated they will integrate HiDTV into US sockets, yet may stick with NEC decoders in Japan & Europe, for political reasons.

At ~11x CIBC's CY08 EPS of $1.80, TRID is trading at a significant 33% discount to its peers. With restatements on their way (likely in May, following abbreviated March Q results in late April), followed by additional top-tier HiDTV design-win validations,they view TRID as a compelling value.

Notablecalls: While the situation at Sony (See archives) remains as an overhang, CIBC's comments may create a bounce n-t. My gut is telling me TRID may be a falling knife here, so look for some bottoming action before gobbling up any shares.

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