Qorvo, Inc. Message Board

  • shirazi2001us shirazi2001us Jan 29, 2010 12:06 AM Flag

    RFMD must buyback shares as long as PE is below 10

    That is the only solution to this rediculous PPS.
    Why is not RFMD management up to task.

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    • Good question.

      The company played fast and loose with shares -- an unwise last stock split, and a serious 60% share dilution to buy Sirenza.

      Before the restructuring, Rfmd counted on rapid growth to make the new share count seem reasonable.

      When that growth did not materialize, Rfmd then put itself on a more sober value path versus growth path.

      Rfmd has not addressed bringing the share count into line to reflect the new value strategy.

      Priddy admitted only now, after 18 months, does he feel the company can take action.

      Shareholders wait.

      • 1 Reply to monrio1
      • Went through the likely cash balances out to end of 1q2012 using conservative mid-high $30m FCF per qtr.

        By the time the 2012 is due, Rfmd would have $490m cash balance and $198m 2012 to pay off leaving $290m remaining in cash.

        So if Rfmd wishes to hold back $90m to operate the company, that frees up $200m to a stock buyback program or approx. 50m shares.

        After 2012 is paid, there are 8 quarters more of FCF to handle the 2014 $135m due. Rfmd still would build another $100m in cash and be debt free April, 2014.

        Possible Scenario:
        April 15, 2014.
        225 million shares outstanding and $190m cash balance and no debt.

        That would make a $12 stock, a triple from current levels over the next four years.

        Pull the trigger, Rfmd.

    • They xhould simply buy when the stock drops below 4. That will be a better destination for their cashflow than buying the converts right now which expire 2012 and 2014 but have very low interest rates( 0.75 and 1 %) ,and conversion price 8.05 usd. So buying the stock at 4 is a much better idea to reduce outstanding stock.