ADNC has traded down since their earnings announcement for two reasons: 1) there was a bit of "buy on the rumor sell on the news" action, and 2) investors were expecting Q2 guidance to be higher. The company is clearly entrenched with Samsung and their expanding business with the Chinese OEMs should more than offset the rundown from AAPL revenues. ADNC's IP is both superior to that of competitors and strategic, which makes ADNC a likely take out candidate (INTL, GOOG, Dolby, etc.). When you consider that the VCs who have backed ADNC are looking to exit at some point, now seems like a logical time to do so, given how ADNC has ramped up with Samsung. Sure, PCs/Automobiles/TV will be other revenue streams for ADNC over the next 2 years, but why risk waiting for that when you've got a great growth trajectory right now and strategic IP that companies much much larger than you are probably eager to get their hands on? Add this to the recent and repeated large insider purchases (especially the CFO), I'd guess ADNC won't remain a standalone company for much longer.
For the patient investor this is a buying opportunity. There is nothing fundamentally wrong with ADNC and all metrics point to a growing company. I think there are two factors driving today's stock move. Piling in by the high speed traders on an initial down trend at the open and panic by the retail investor. I wouldn't be surprised if the stock closed somewhere over 14 today and anyone who bought between 13 and 15 will see a profit over the coming week and for the long term.
I don't have a clue mate. I had to sell half my position at 13.90 this morning, as I hit my loss limits. The company is worth around $30. It beat estimates, it is growing. All the analysts are raising their recommendations.
The only issue for me is the growth slowdown
Q2 (Jun) 2012 $33m
Q3 (sep) 2012 $41m (+$21m) (+105%)
Q4 (dec) 2012 $39m (+$21m) (+117%)
Q1 (Mar) 2013 $47m (+$16m) (+52%)
Q2 (Jun) 2013 $44.5m (+12m) (+30%) (guidance) (though what management is saying Q2 revenues were pulled forward to Q1 as a result of S4 launch inventory buildup). So it would have been $44m (Q1) then $47m (Q2).
But from my perspective I have only been projecting 15% annual revenue growth over the next five years. So I have been expecting this.
I'm hoping to see buying in the last 30 minutes of the day.
Of course they have single customer exposure (62% of their business is Samsung) however, Samsung have only just launched their new phone, so their is no way anyone could project them losing the Samsung business before the end of Q3. My understanding is that Audience is in the new Note 3 that is coming out in September.
I don't know how you manage risk, but if you have a stop loss policy then use it, or at least sell half. No one can predict the future, their is always stuff out there that you don't know and won't know until it is too late. The point is not to try to be right, but to cut losses and let winners run.