I just went over my trades for the last 3 years and for every dollar I put in I lost about 5 percent. There are worse things in life than losing five percent. The thing that saved me was I sold a large portion of my shares in the 20's back in 2014 when they got apple and I did some buying on the way down making some large purchases in the 10's and 9's. I unloaded most of my shares now. Things will turn around but its going to take time, probably a year. The huge unknown is the Iphone 7. I don't plan on holding on to a lot of shares into the teardowns.
I was looking at the financials last night and apple did a real number on them. INVN went from a very profitable company to break even in a matter of 18 months after taking on apple. Yes they increase sales some 70 percent in total, but on the flip side gross margin in total increase only 40 percent and R&D quadrupled while SG&A expenses doubled. They essentially took all the gross margin and spent it on opex. That's why the analysts were asking if they were "fully invested" going forward and they responded by saying they have no plans to increase opex that much going forward.
INVN is tethered to mobile right now. Its "other bucket" is only 20 percent of sales. Although its growing and 80 percent of new wins are outside mobile, these new wins are small compared to what a Samsung or Apple purchases currently. The company is probably at best fairly valued right now. Just doing some simple analysis, its traded at about 15 to 18 times forward estimates on the high side and 10 to 12 times forward estimates on the low plus net cash. Right now carving out debt they have about a dollar a share in cash. That puts us at about 10.72 on the high side and 6.40 on the low. Doing a discounted cash flow model ssuming next qtr will be beak even, and assuming about a reasonable ten percent growth rate and a market discount rate of 8 percent gets me to about 7.90 a share. I think we go into the 6's before we get back into the tens. Yes they can get back into Samsung but that wont be until probably early next year with the release of the next Galaxy. The only thing I see maybe coming out of left field is some kind of buy out offer that's why I still have a core position. I would not be surprised if apple takes this as an opportunity to just squeeze margins even more. Apple has consistently done major redesigns on the Iphone in even numbered years. If any share loss is shown with apple, the stock will suffer.
Yeah on 60 minutes a few years ago they did a segment on a research study of homophobia. They took a bunch of heterosexual men and had them fill out a questionnaire on gay people. The researchers then rated the men from least hateful of gays to most. They then had these men watch gay porn (they weren't told what it would be before hand, just that it would be pornographic) and measured sexual "reactions". It was found the guys that disparaged gays the most got the most excited watching gay porn. Guys that were indifferent got the least excited.
We will probably be seeing the 6's before you see 9 as this short covering spends itself out and we drift lower as buyers like myself are on the sidelines looking for some clarity. The thing I don't like is now apple is over half their business and might use that to squeeze margins further. At any rate I sold most of my position in the low 20's but did do some buying on the way down so I didn't get to keep all my gains. This is a good lesson for people. Bulls make money, bears make money and pigs get slaughtered. I have no intention of holding a large position going into the Iphone 7. You might lose a few points on the upside but if teardowns reveal cutbacks in INVN content it will be brutal.
Its going to take awhile. The coursa announcement in my opinion is key. So was their announcement of partnering with a major automobile sensor supplier. I also think 27 million in cash produced this quarter versus 17 million last fiscal year is also important. What I will be looking for in the CC is revenue breakdown by segment. I want to see mobile keep going down and IoT increasing.
Results from R&D?? Do you actually follow the company?? Wow. Try reading some recent press releases. That might provide enlightenment.
I am looking at red across the board today and am hopeful because analysts now on cnbc are using words like washout, capitulation, depression (emotional not financial) etc. These are all indicators of excess being wringed out of the market. Unfortunately the good along with the bad get taken to the wood shed. I see profitable companies with solid balance sheets that weren't expense before 2016 getting whacked. None of my stocks are leveraged (invn is the only one I hold that has any debt) they all made their numbers, they all make money, they all have positive free flowing cash flow, so I am just staying put. I added to my invn at 8.60 (some a little lower) and its been my experience I usually hit within ten percent of a bottom when I do buy. I don't buy stocks on momentum. I buy them on fundamentals. And right now a company that produces over a dollar a share in cash with a net dollar in cash per share on the books when debt is deducted, looks pretty good to me.
This is a broken market and when I have made my most money buying. The baby gets thrown out with the bath water. INVN is not a broken company (chipotle, gopro, etc) its a manipulated stock in a broken market.
And if you let the traders whipsaw you (buy when its up, get scared out when it drops) you will never make any money in this stock or any other for that matter. I am here long term and until technology fundamentals say differently, plan to stay here. I suggest that people who want more reasoned outlook go to the seeking alpha website.
I have been here for about 3 years now. You buy when the stock is low and you take some off the table when its high, hence me selling a large part of my stake in the low 20's and adding in the 9's and 8's. This stock has always been whipsawed by traders. That's how they make money. This is just leftovers from Fridays options expiration. And it was Rosenblatt not Rothschild with the rating cut. Rosenblatt also said he sees positive upside in the back half of 16.
I wouldn't invest my money based on someone right 15 percent of the time. And I am trying to cope and paste the article from analystratings but yahoo for some reason keeps deleting it.
"Rosenblatt analyst Jun Zhang downgraded InvenSense (INVN) to Neutral due to market share loss at Samsung, increased optical image stabilization competition, Apple's (AAPL) weakness, and gyroscope pricing pressure. The analyst lowered his price target to $10 but remains opportunistic for Invensense in second half 2016 due to both 100% share and possible content dollar growth in the iPhone 7, and M&A opportunities."
This makes no sense.