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Cirrus Logic Inc. Message Board

  • lightdoesnotage lightdoesnotage May 24, 2013 7:45 AM Flag

    before I invest here, a question

    Does Cirrus have a plan to diversify from being an iphone supplier?

    I have been caught in other stocks with collapsing margins whose PE looked great on paper. Corning burned me badly...I was in at $18 and it still has not recovered. It had cash and a PE well under 10.

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    • watch the presentation. The CEO said this:

      "When it comes to our customer base, we are actually quite diversified, it just so happens that one of those customers is extremely successful"

      CRUS actually serves a lot of customers, but Apple just happens to be such a massive company that it ends up being 85% of business. Yes if they lost AAPL the PPS would probably halve or more in one day..but the likelihood of that is slim considering they just reduced margins to accomodate Apple's needs/demands. You can make up your mind as to whether you see this as a negative thing or a positive thing. If AAPL tends to do well, it will continue to make up the majority of CRUS's income. If one of CRUS's other 2500 customers hits a homerun, like AAPL did with the iphone, that could help balance things out. Keep in mind though, if that were to happen, the price would reflect it before you have a chance to get in.

    • I think their products are VERY diversified. It's just that their profits aren't. They are all from the iPhone.

    • 85% of the current business is from Apple with that number fluctuating only by the amount of business Apple does with CRUS. The remaining business has been constantly weak and will stay weak for some more time going forward. If you would like to learn more about their revenue streams apart from Apple just look at yesterday's presentation on their website. This is still mainly a one customer story and this is firing back badly at the company now.

    • CRUS is already a diversified supplier, although there isnt only one that buys those extreem quantities.
      And frankly there isnt alot of such large companies out there.
      Maybe if they cut some of there margins and offered special deals to samsung, they could get the sales volume to compete with what apple is ordering.

      Maybe when LED ligtinh comes up in bulk (the dimmable ones) we could get an improved diversification ratio.

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