Thursday, September 20, 2007

Paperstand (RFMD, FOSL)

Barron’s Online highlights RF Micro (RFMD), whose stock is down 10% YTD. It's hard to believe that a co supplying the burgeoning cellular-phone mkt is trading below mkt value, at a forward P/E ratio of 14.9. That's what happens when a major customer falls apart -- in RF Micro's case, Motorola, whose handset sales began to collapse this past spring. RF Micro has further challenges ahead as Nokia and Motorola make deep changes in the chips they buy. But much of the pain is now reflected in RF Micro's share price, and the co still has a very valuable portfolio of chips for the future of the cellphone industry. Earnings forecasts for the year ending in March fell some 45% back in April, but ests have since rebounded, rising 13% in the last 3 mo’s. And next year sales are expected to rise 17%, spurring profit growth of 61%.

“Inside Scoop” section reports that Pres and COO of Fossil (FOSL), Michael Barnes, sold all of his 72K shares, mostly directly held, on Friday for just over $2.6m.


dcxavier said...

RFMD has been a serial disappointer going back to the dotcom days. Even when they have top selling components, they still can't find a way to make money on them. Maybe you can day trade it, but I'd never stick it into a long term portfolio.

dcxavier said...

Yes, it made $7, but now that earnings are out it's back to the $6's. It's the old story, this time poor yields on their hot Polaris chip.