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RF Micro Devices Inc. Message Board

  • zapmaster_the_kinq zapmaster_the_kinq Feb 27, 2010 9:13 PM Flag

    What's your take on RFMD technology

    Compare to peers.

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    • There is no match for RF6460 that released recently.

      http://ir.rfmd.com/releasedetail.cfm?ReleaseID=392708


      RFMD(R) Announces Industry's First Converged 3G/4G Cellular Front End Platform Capable of Nine-Band Coverage
      RF6460 Supports Up To Five Bands Of 3G/4G And All Four Bands Of GPRS/EDGE

    • Looking at 3 companies, SWKS, RFMD and TQNT all have the base technology and they have been in this business for over 10 years (left ANAD because it is very small). Having said that, they are more or less able to advance in one area but others usually catch up. SWKS advanced in 3G/4G but RFMD is catching up. It was in SWKS benefit to advance in newer technology to increase revenue. On other hand, RFMD has advanced in manufacturing and mass production and now is changing gear to technology. In 2002, SWKS revenue was almost twice as RFMD. By 2006, RFMD caught up with SWKS. From 2004 to 2007, SWKS revenue was either flat or lower. Meanwhile, TQNT has emerged and almost doubled its revenue by 2007. In the same year, RFMD became aggressive with acquisition while TQNT and SWKS made progress in technology. Struggling with debt, RFMD faced with weak economy that let SWKS and TQNT to gain market shares. To stay in the game, RFMD hanged to low margin products to reduce the debt. Meanwhile, RFMD leaned to work hard on new technology. Some new products from RFMD may be more advanced than TQNT and SWKS, but it is a long way to go. It is not the end of the game and RFMD is coming from behind while it is improving its financial. RFMD has manufacturing advantage over TQNT and SWKS. If it can advance in the technology then it will be ahead of the game. Other factors like debt, cash and outstanding shares are secondary and they will be improved as RFMD makes money.

      My message: RFMD is underdog, underdog is ignored, and it is given a low valuation. Investors with patience can make a killing in this stock. The reward is big but it takes some times. By next quarter when new numbers appear for FY2011 and FY2012 for RFMD, even forward PE of 9 puts RFMD at price above $5.

      • 1 Reply to veqasfletch2001
      • "My message: RFMD is underdog, underdog is ignored, and it is given a low valuation. Investors with patience can make a killing in this stock. The reward is big but it takes some times. By next quarter when new numbers appear for FY2011 and FY2012 for RFMD, even forward PE of 9 puts RFMD at price above $5."
        ............................................................

        1. Many investors won't break even until the stock returns to above $6 not $5. Look at the chart in 2H07 when the problems manifested. Remember not everyone has the same cost basis and a return to $5 still leaves many underwater, and the company underwater from the August, 2007 merger price of $6.14. Making a killing on anything above $6.14 means what? 20% return is $7.38 but over three years, that is 6% annual return. Rfmd has a longer way to go to recover, to generate any return, let alone make a killing for investors.

        2. The track record of Swks over the past several years does not indicate that they will stand still while Rfmd catches up.

        3. What saved and will save Rfmd's bacon, besides their own sane turn toward core competence, is demand outstripping production capacities. The handset makers need Rfmd for its production capacity, but even so, Nokia has pressed business onto Swks forcing Swks to expand its volumes.

        Putting a rosy bloom on Rfmd's ability to recapture lost ground is a natural, logical, wishful, optimistic, and reasonable assumption. Does anything guarantee it?

 
RFMD
7.87-0.08(-1.01%)Apr 17 4:00 PMEDT

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