As I was looking for new investment opportunities, I checked MSCC.
IMHO, I am still concerned however about warning flags that were raised about the discrete product group over the last year or so...
What about termination fee of $137.3 million? It seems no one is considering it...
I for one, do hope however that MCHP wins the contest!
The dividends are indeed a sign of confidence. However, in the CC it seems that certain parts of the business are still questionable: a) the gallium arsenide business is being emphasized but the silicon business is not even mentioned. This is interesting since all the design centers – Turkey, Canada, Norway, Colorado Springs are doing all their work in silicon. b) All the VPs that pushed for the existing design centers are now gone. Does this mean that the reward vs. cost of these entities is questionable and their future is in doubt?
Good, bad, or indifferent, it seems that some significant changes in personnel are being ignored by most:
Nancy O'Regan/ Susan DiCecco, Norm Hildreth/Thomas Hwang/ Larry Ward…
Probably additional names should be mentioned but the above occurred within the last 6 mos and I found them after a 10 minutes search.
Maybe the changes were long overdue and are going to improve the outlook for the company (one would hope!).
Just wondering whether any of the analysts at the quarterly conference call are going to ask some real questions:
• How are Hittite design centers affected by the turmoil in countries like Turkey (large center) and Egypt (reported a few quarter ago) both in terms of output and future extensions
• What are the results of the enthusiastically reported acquisition of design center in Norway - 2 years after the intro of their products
• What are the results of the enthusiastically reported acquisition of Velocium
• Foundry contractual issues – GaAs and silicon
(PE), price to earnings growth (PEG), price to sales (PS), and price to cash flow (PCF).
The valuation rating for HITT remains a MOST RISK. Jefferson Research downgrades HITT to sell - … Valuation suggests a higher amount of price risk, and
Operating Efficiency is weak. Also assets turnover are weak compared to previous Q. When combined, HITT deserves a SELL rating.
An unfavorable valuation (a MEDIUM RISK or MOST RISK rating) implies higher potential downward price risk that is evidenced by a company price multiple that is higher than the corresponding sector average. The valuation rating is based on both absolute and relative levels at HITTITE MICROWAVE CORP compared to its peers within its sector based on price to earnings
Some views of analysts opinions:
Hittite Microwave Corp.'s earnings have declined to an estimated $2.28 from $2.72 over the past 5 quarters, they have shown deceleration in quarterly growth rates when adjusted for the volatility of earnings.
The company has generated a negative trend in earnings per share over the past 5 quarters. However, while recent estimates for the company have been lowered by analysts, HITT has posted results that fell short of analysts expectations.
Hittite Microwave Corp is currently rated as having Aggressive Accounting & Governance Risk (AGR®), receiving an AGR score that places them in the30thpercentile among all companies in North America, indicating higher accounting and governance risk than 70% of the other companies.