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Silicom Ltd. Message Board

  • fish.andchips fish.andchips Sep 17, 2013 9:56 AM Flag

    $240 price target of Silicom

    The article posted yesterday on Seeking Alpha (last 3 paragraphs are below) suggests that SILC will have revenue of $250 M, a PE of 30, earnings of roughly $8.00 and a PEG of 1, meaning they are expecting the stock to get to $240. No timeframe is given, but a very bold call.

    "Long term, I expect that Silicom will continue to prosper in the Networking markets, thru further new product innovations and from gaining further market share with existing customers. Another strategic transformation for Silicom will be to ride the wave of the coming Telecom and data center convergence alongside the migration to the 100GB data center world and produce revenues in the area of $250MM annually which will yield earnings of roughly $8.00 per share assuming 7MM shares outstanding and a 22% net margin. This implies a more than 30% CAGR and assuming a PEG of 1 and a P/E of 30, there is strong appreciation potential alongside the rising annual dividend while holding.

    With a diversified customer list approaching 100, and a cadre of products that are designed into a product that usually takes months or years to get embedded, Silicom has rather manageable risks for a small technology firm and could not easily be replaced.

    This quiet, well managed company with its black bag of innovative products will be an exhilarating trip on a magic carpet ride through the cloud."


    Sentiment: Strong Buy

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    • I am all back in. Added back all my trading shares after some questionable trades (as always). Net net I sold most trading shares around $38 and added them back at $33 with core intact. I think you would have to think a disappointing 3 qrt is already baked into the price. I happen to think it will be a record qrt with only upside from here.

      What would have to be announced in q3 for the stock to trade unchanged? Curious for your input...

      Sentiment: Strong Buy

      • 1 Reply to larrykudlow2003
      • larry, What do you consider a bad quarter? If it's missing the posted revenue estimates even by a fraction, I think in no way is this built in.

        This is an underfollowed, under owned by institutions micro cap. I think starting with the Maxim action, there may be an attempt to pry shares out of longs hands. Call me cynical but................ I also think that with the inventory build up over 40% from the previous quarter, expectations have to be building.

        I think they deliver a strong quarter, whether that's a record this Q or not I'm not sure but if not this one, Q 4 should be their best Q by far.

    • I think management is targeting 250M at some point....just by calling 100M for the midterm.....historically the jumps have all happened in Q4....Q3 should have no surprises....I think the back half of the growth to 250M will happen at a much faster clip than the front half....

36.46+0.12(+0.33%)Dec 24 1:00 PMEST

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