Continuing to conduct my due dliigence on MXL and am surprised at the lower valuations here; P/E and especially PEG. MXL basically preannounced their 2Q 2015 numbers which will be reported on 8/10/2015 and gave updated guidance on 2H 2015.
Everything looks good according to the PR giving this data with non-GAAP EPS rising nicely and GAAP EPS getting near profitability. The share count is increasing but I think that has to do with convertible warrants from either or both MLX and their recent acquisition Entropic.
Does anyone here have a better handle on how/why the share count is expected to go from 54.7 million fully diluted shares to 62.5 million at the end of 2015.........and is there additional dilution coming due to outstanding warrants and commitments?
I am considering the following investment scenarios:
+ Buy shares and go long
+ Buy shares and sell future call options for income, downside risk mitigation and overall 'fixed' ROI
+ Sell future puts (bullish play) for either a lower buy-in price or just the option premium depending upon which strike price I sell
Keep SPIL on your watch list as the valuations are compelling.........and the dividend seems somewhat safe as the payout ratio is around 60% of annual profits.
I am not sure what the catalyst will be to move this stock........but the valuation is very low. There is also only one analyst following this and that analyst is/was bullish.
I don't plan to make any purchase here as there is just no interest in this stock. The testing and packaging sector is not highly prized or valued (see IMOS also who is suffering). At some point, I do wonder why the chip companies don't take over and move these services in-house as it seems there are savings to be had........and certainly some efficiencies in handling. Heck, I would invite the testing/packaging company to set up shop in my plant for these efficiencies and ask them to cut their prices by 20% for these efficiencies and space. Win-win.
I don't see any indication of this (from your note "looking like shorts are positioning for a push down on the CC") in the price action the past few weeks as GNW has already been taken down. If this was going to be done post earnings, they would have pumped the share price up to make more money........and exhaust any buying demand.
What are you seeing to indicate this?
The revenue and earnings will speak for themselves............and then the company execs will have to explain the write-offs and restructurings as well as give a road map forward for further actions along with expected revenue and earnings.
Good article on SA at seekingalphaDOTcom/article/3363685-with-android-auto-google-goes-after-teslas-infotainment-advantage
It discusses the ramp up by the auto manufactuers but primarily on 'infotainment' (maps/Phone/internet for music & podcasts, etc.) although we also know there are side and rear cameras coming along with impact or distance sensors. Most likely HIMX will sell components to those who sell to the company supplying these to the auto manufacturers (like screen drivers, touch controllers, combined screen & touch controllers, CMOS for side/rear cameras, etc. along with any who want LCOS for Heads up Displays).
The article doesn't mention component suppliers other than Google and Apple which form the basis of these via plugging in your phone. A key selling point for the auto manufacturers is that their cost is very little as they really only supply the plug and a larger display (along with speakers which they already supply).
Key out takes from the article:
GM: will roll it out in all of its vehicles, about half in 2015 and the rest in 2016.
Kia & Hyundai: Many models no later than the Fall of 2015.
Honda: Its best-selling car, the Accord, starting in August 2015, and the rest of its cars in steps over a 1-3 year period.
Ford : All of its cars, but no exact timeline provided, although widely believed to start this upcoming Winter and take 2-3 years to complete.
Volkswagen: Rollout starts next month with its best-selling Golf and Passat models, and with other models to follow over a 1-2 year rollout schedule.
Volvo: The flagship XC90 SUV starts in 2015 and other models will complete the circle in 2016-2018.
Audi: The Q7 SUV will be first car to offer Android Auto in January 2016, and the rest of the lineup phased in over two years.
I think you get the point. Most of the automakers will be rolling out Android Auto in most of their cars over the next 1-3 years, and many will have close to half of their lineup covered.....
Seems a bit over 1 million shares or shorts covered during the first half of July. This is a bit slower pace of covering than the 6.7 million shares which covered during the entire month of June and brings GNW short volume to the level it was in mid-April 2015.
This bit over 1 million shares is just a small percentage of the shares traded in the first half of July when GNW stock price did move up a bit. But, this price movement may have had little to do with short covering as the first half of June saw nearly 6 million shares cover while the price declined nearly 1%.
So, what caused the price decline from mid-July to now; increased shorting or selling ahead of the Conference Call..........or just general market sell-off.
Perhaps the best correlation between shorting and price is seen from 4/30 to 5/15 when an additional 5.1 million shares were shorted and the price declined $0.88 due to this larger increase in the float (probably around 10% of the shares traded in that period were new shorts). But, we did not see any recovery in share price when nearly 6 million shorts covered in the first half of June.
Settle Date Short Interest Share Price
7/15/2015 16,682,590 $7.80
6/30/2015 17,713,865 $7.57
6/15/2015 18,490,262 $7.87
5/29/2015 24,447,465 $7.94
5/15/2015 24,764,438 $7.91
4/30/2015 19,645,260 $8.79
4/15/2015 16,645,150 $8.09
3/31/2015 13,482,435 $7.31
See the LXRX Website under Clinical Trials. The About section for Telitostrat says 100,000 people in the USA according to the American Cancer Society. Without knowing drug cost, duration of treatment, etc. I can't verture a guess into the market value.
I think MXL if somewhat attractively valued although they will have some good price comparisons. But, most of this is due to their purchase of Entropic Communications.........which seems like it was well planned and accretive to earnings.
But, what do you make of the difference between GAAP and Non-GAAP earnings (they lose money GAAP) and then the increasing number of shares going forward?
From their 2Q 2015 guidance:
Revenue is expected to be between $68 million and $72 million for the second quarter 2015.
GAAP and non-GAAP gross margin in the second quarter 2015 are expected to be approximately 41.5 percent and 57.5 percent, respectively, +/- 2 percent.
GAAP and non-GAAP income/(loss) from operations for the second quarter 2015 are expected to be a loss of $30 million and income of $12 million, respectively.
Basic and fully-diluted weighted average shares outstanding are expected to be 52.5 million and 54.7 million respectively.
From their 2H 2015 guidance:
Revenue is expected to be between $175 million and $185 million for the second half 2015.
GAAP and non-GAAP gross margin in the second half 2015 are expected to be approximately 50.5 percent and 55.5 percent, respectively, +/- 2 percent.
GAAP and non-GAAP operating expenses for the second half 2015 are expected to be $100 million and $64 million, respectively.
GAAP and non-GAAP income/(loss) from operations for the second half of 2015 are expected to be a loss of $9 million and income of $36 million, respectively.
Basic and fully-diluted weighted average shares outstanding are expected to be 60.5 million and 62.5 million, respectively.
I am just doing research on MXL and am surprised by the price weakness. But, the chart shows it now pulling back toward the 50 DMA and may be a good buy point.
I have had SIMO on my watch list for some time (along with IDTI). I also saw where SIMO corrected a bit after pre-announcing revenue toward the top end of their guidance. I may pick up some Jan 2016 call options on it next week.
I only stated what I saw on Yahoo Finanace on SPIL and what I look at for a quick review of any stock.
I also look at the chart to find a good buy in point and forget to mention that the SPIL chart has the opposite of the golden cross going on with the 50 DMA (Day Moving Average) just now dropping below the 200 DMA and declining which is a negative.
I would like to know more about what the analysts see in the future to show such a lower PEG while their current revenue and EPS estimates for 2015 & 2016 show little growth (PEG is usually growth over 5 years).
There may be something here as the P/E is lower as are the P/S & P/B with a nice dividend coming. But, the chart looks lousy and previous years the share price took quite some time to recover from the dividend payment........always something to look at when buying something for the dividend. HIMX generally recovers quickly from the dividend if you look at it historically.
Thanks for starting this discussion here on this MB where it belongs.
I did a quick look at SPIL a week or so ago when Jeb mentioned it and found:
+ SPIL seems to be fairly to undervalued on typical metrics
=== P/E of 11, forward P/E of 10 and PEG of 0.53. P/S & P/B both I do question the PEG as the growth rate looks low (~4% to 5%) while the PEG indicates a 19% growth rate for a 0.53 PEG and 10 P/E
=== Only one analyst supplying revenue and EPS estimates
=== Do give it a favorable 1.3 Opinion and average of 2 price targers is $9.80 (low $9.17 & high of $10.43) which suggests good upside potential
+ Short volume is over 3 million shares and was down just slightly in the last reporting period (i.e. only moderate short covering ahead of dividend although there is more time to cover before the es-dividend date)
+ Look at history of share price action around dividend
=== 2014 did not run up into the dividend but share price did not recover dividend for months (look at history with adjusted price set to weekly)
=== 2013 did see some run-up into the dividend but the share price did not recover the dividends for ~3 months
So, this does not look like a good dividend play. It does seem to be attractively valued but I don't know enough about the company to make an investment.
But, I am always on the look for good investments.........and it takes only a bit of time to review this information and keeps your analysis ability sharp from practice.
I would consider buying on weakness here..........but EPS and revenue growth is very low and thus PEG doesn't seem correct.........or growth is in outer years like 2017/2018 meaning no hurry to buy.
Why did your answer only focus on the one question of display.........as you should know used an LCOS display that is now 2 generations of LCOS ago? It was not the award winning LCOS and thus that whole bit your wrote is not relevant.
Then, you cmpletely ignore the other questions.......which has been your MO.
Sorry that you are so focused on trying to prove your own point that you focus on outdated items and miss everything else.
Again, you have good knowledge and I give you credit for researching.........but there is much logic you miss........AND AVOID!!!!
Another cop-out by you as you bail out when you can't address the issues/my responses to your primitive comments. Just go on being a legend in your own mind.......but you can't debate the issues:
+ Why did Google select HIMX LCOS for their Explorer Edition........and take an equity stake in HIMX?
=== No one complained about image quality in these Explorer edition......and HIMX has upgraded their LCOS display since
+ The award was won by HIMX LCOS but was in the category of: "2015 Taiwan Outstanding Photonics Product Award from the Photonics Industry and Technology Development Association"
+ Why do most all the analysts state that HIMX is in Hololens and no one really challenges this?
+ Why are several Tier 1 companies working with HIMX R&D.......and sometimes paying this cost?
+ Why even Chardan now has reversed themselves and has a higher target on HIMX (as does several other analysts)
Who are your picks in this space...........and why........and what is the average cost of their displays? Were any of them ever in a Google HMD.........or did Google take an equity stake in them? What are their existing manufacturing capabilities?
You will never learn if you are willing to debate and reconsider your opinions. Note that I never said I had the answers and I am willing to debate and converse in the quest of learning and improving.
Daniel Boorstein wrote that "The biggest obstacle to discovery is not ignorance...but the illusion of knowledge." Look in the mirror!!!
Okay, if you don't want a serious and intelligent exchange, just say so. While you have much knowledge, you do struggle to draw a conclusion.
1) Why do you think Google selected HIMX LCOS for their Explorer version?
You=== Because they are cheap displays ($20 estimate) & Google thought they could make more money as one possibility...
Me: That is just plain idiotic. Google was not out to make try and make money on these. They were a beta and for learning. The $1,500 price was to keep them to serious people/organizations but to also get cover the cost for the Software Development Kit (SDK) and the inevitable technical support. And, if you recall, Google did give away their updated model to the early adopters which affected their profit margins.........proof they were not focused on profits.
Recall also that Google took an equity stake in HIMX so that meant some staying power as would they have done this if they were (as you wrote) "to get a beta out the door as quickly as possible"? And, Google did not take the additional equity stake as they did not want to upgrade HIMX manufacturing capability as they were not ready to order more and did not want to help their competitors whom Google knew were working with HIMX and would be using HIMX LCOS.
Note also that no one was complaining about the image quality on the Google Glass Explorer Edition.
2) Why do you think MIcrosoft selected HIMX LCOS for their Hololens?
You=== Still speculation IMO...
Me: That is a cop-out answer.....but riddle me why so many analysts speculate that MIcrosoft Hololens displays are from HIMX...and no one seems to be correcting them? Note also that HIMX LCOS have won several awards......including this from Junje 16, 2015 'Himax's Front-Lit(TM) LCoS Module Wins 2015 Taiwan Outstanding Photonics Product Award'.
The rest of your note is also a cop-out. Why not get serious & think rather than try to show-off? There are reasons Tier 1's are at HIMX.
Could be that GNW is now responding to Yellen's testimony and statement that a rate hike(s) to move monetary policy toward normalcy is coming starting in 2015. Many experts are firming up their predictions for the first rate hike (most likely 0.25%) to come in September 2015.
As this is pretty widely accepted now, there is much less change of this causing a market correction...........as it is quite small, it is well telegraphed...........and history shows that the correction generally doesn't start until after several rate hikes (history shows market keeps advancing after first reversal in rates from dropping to increasing).
Interesting and there are going to be various attempts at converging AR & VR. This seems a bit contrived and I wonder if 'morphing AR into VR might make more sense???
But, what you link is a not a simple mod and has many issues including tethering (wired and wireless), some latency (which was one of the root causes of nausea), bulkiness (which has been a huge issue....and also impacts the style/geek factor as well as simple ergonomics), etc., etc.
Hololens is a stand-alone device (no wires/wireless requirements unless you want internet, etc.) and has virtually no latency issues as it provides an overlay onto reality rather than recording and streaming reality.
Otherwise, I am not interested in getting into a #$%$ match with you. I tend to be a realist and interested in the real world and what is actually going on. There is a reason Hololens is working with HIMX and there are probably numerous reasons for this which you and I do not know. The same for the other tier one companies working with HIMX (and funding R&D). HPU (Holographic Processing Units) and timing controllers could be additional reasons.
One other item which can not be over-emphasized is that HIMX has LCOS manufacturing capabilities which can be ramped up as required.
Now that I have responded to you in a civil manner, how about answering these questions from long ago:
+ Why do you think Google selected HIMX LCOS for their Explorer version?
+ Why do you think MIcrosoft selected HIMX LCOS for their Hololens?
+ Why do you think Oculus selected HIMX timing controllers for their Oculus Rift?
+ Why are so many other Tier 1 companies working with HIMX R&D?
There is a saying by Daniel Boorstein that "The biggest obstacle to discovery is not ignorance...but the illusion of knowledge." Sometimes it is better to try to understand what is happening and why rather than trying to out-think the issue and others. You are knowledgeable but don't consider the above questions
You forgot to mention that Hololens will also be targeted for Minecraft and other games developed with Hololens in mind. Nadella has mentioned this many times if you are following the news.
With that written, I have long said that enterprise is the correct target market as corporate, educational, medical and government has a proven economic (productivity improvement/reduced errors) payback for using Hololens and AR so they are not as sensitive to pricing or to the various privacy issues some people seem to be worried about (as if cell phone cameras did not remove all semblance of 'public privacy').
And, with people using them at work, they can get comfortable seeing and using them..........which makes targeting the much more divergent and fickle consumer market (outside of Minecraft of course) a logical second or third step.
So, it is only wise to target enterprise first.
Forgot to list the Microsoft Worldwide Partner's Confernce which started yesterday in Orlando, There is a lot of news coming out of this conference and Hololens is prominently mentioned in many of these........along with associated partners and App developers.
Google this conference and limit the news to the past 24 hours and you will see quite a bit of solid news on Hololens.
Pus, read the intevew with Nadella who mentions Hololens numerous times.........so we know that it figures in quite prominently in Microsoft's future.
Last year, HIMX announced their 2Q 2014 conference call on July 21 and held it on August 7, 2014.
So, we should probably get their 2Q 2015 conference call PR next week and it should happen between the 5th and 15th of August.
As such, if there is any pre-announcement, I would expect it to come next week when they announce the 2Q 2015 CC date.
Very disappointed that Yahoo 'lost' my earlier post but I will try one more time.
I see significant options being traded on GWN with a very high ratio of Calls to Puts. Of course, there is a seller for every buyer but here is what I see:
+ Aug $8 Calls had 2,801 contracts (280,100 underlying shares) traded at ~$0.33/share which is several times the open interest of 551 contracts
While I initialy wrote this when GNW was trading slightly up, it is now up $0.18 to $7.66 but see this possible trades:
+ Buy here at $7.66 and sell the Aug $8 calls bidding $0.33. This could net you $8.33 or a profit of $0.67/share or around 8.7% over one month of over 100%/year return on investment. The $0.33/share option premium protects you (or lowers your basis on GNW) to $7.33.
+ Buy here at $7.66 and sell the Sept $9's which last traded at $0.19. This could net you $9.19 whichi s a profit of $1.55 which is ~20% return over 2 months of over 100%/year.............with downside risk covered to $7.57 with the $0.19/share option premium.
Both of these trades were looking much better when GNW was up just slightly and when i tried to post this.