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Silicon Motion Technology Corporation (SIMO)

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
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63.55+0.15 (+0.24%)
As of 11:29AM EDT. Market open.
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  • G
    Geezer31
    What's next for SIMO? The company has been very quiet this quarter. My guess is they will beat the high end of Q2 guidance as they find a bit more foundry allocation, and revenues will grow a lot faster than expenses this quarter. Ferri should ramp and who knows, perhaps Shannon Ali Babba Open Channel with even return to life. The stock is way undervalued at $65 level. If revenues are really going to reach $1 billion with ~2 years the stock price should be closer to $90. Leverage will increasingly become apparent with revenue growth, and SIMO's large cash position should begin to grow rapidly again.
  • G
    Geezer31
    All the newsflow seems to be strong and positive. 5G cell phone sales are ramping (Mediatek just reported a record month of May quarter). PC sales are an area of strength. NAND flash prices are actually climbing a bit despite management commentary that NAND supply is abundant. Intel is due to release the new processor that SIMO management has been talking about for about 18 months. EVERYTHING points to a positive Q2 beat and raise. We all know that TSMC is going to find extra supply for SIMO, because if the PC maker or cell phone maker can't buy the SIMO controller, then they can't make and sell the entire device. SIMO will get preference in foundry allocation, and sales will go up. So.....why we sitting below $70? We're going to get at least $215 million sales in Q2 and guidance of $230m for Q3 in the middle.
  • p
    peendee
    I don't think investors get the best case for $simo. If everything goes right, share gains in SSDs/UFS w ASP positive mix shift, the Internet of Everything Connected(IoEC) explodes for their eMMC product, and strong reception of enterprise grade controllers, the company can make $10+ eps in 2025 on revenue of $1.8-$2 billion. At that point the dividend should be $3-4 per share annually. Assuming stocks are still expensive because of stupid global central bankers and interest rate suppression, the stock could be $200+ in 3-4 years. Maybe we even get a 25 p/e ratio after such a stunning period of growth and a $3 handle on the stock price.
    True, Chinese / Taiwanese military conflict may represent a real geopolitical risk. But this applies to many companies, not just semiconductors. TSMC makes most/all chips for massively expensive stocks like nvda and amd. They too are at risk. And, since many every day products contain high semiconductor content, the entire global economy would be at risk then. One can even argue, $simo would get preferential treatment as a "Chinese" company.
    There's always risk in equity investing, especially technology companies. And stock markets around the world are at record valuation levels. $Simo represents an inexpensive way to play positive secular trends in storage, IoT, and increasing semi content in most devices, from autos to cell phones to refrigerators. This idea represents a solid reward potential for the risk one assumes. Buy and hold for 36 months and see how this opportunity plays out.
    As always, perform your own due diligence. Best of luck to the longs.
    Bullish
  • y
    y
    It will be a shock and very negative if Simo fails to deliver its Q2. TSM factory appears to running normal. So with the strong demand, it should not failed to deliver.
  • G
    Geezer31
    Digitimes is full of positive articles. Notebook orders robust.
    Taiwan IC design houses expected to have a strong Q2. Memory prices increasing. PC makers increasingly placing orders directly with chip makers. PC sales in Asia remain strong. 5G gold rush is here now. SIMO seems too cheap below $70, some larger semi company should buy them for $100 to quickly right size the valuation.
  • T
    The Truth
    Come on Geezer and everyone else who believes in SIMO's performance. The only genius in the universe (aka Intel Steve) has projected SIMO to go to $40s in 3 months. Sell and run for cover!

    hahaha
  • p
    peendee
    $MRVL conversation
    If you own and like $mrvl, check out $simo. Both companies make storage controllers, $mrvl as a portion of biz and $simo as all it does. Marvel is fine company with solid growth outlook after a decade of stagnation. Silicon Motion is experiencing huge market share gains from strong design win cycle as NAND makers outsource low and mid range performance controllers primarily to both $simo. As evidence $simo backlog up close to 100% year on year in 2021 and company said revenues would be close to $1 billion without wafer supply constraints, or up 85% in 2021. But supply shortage real so company will hit $1+ billion in 2022 imho and make $7 eps. At current price, stock is 9x's 2022 eps! With 40% organic growth rate, stock should be 20x's at least, or $150.
  • P
    Powerpc_marker
    SIMO is investing cash to build a big company building instead of share buyback. Once completed, they will sell this building and lease back. It is a smart invest decision during housing boom/inflation period.
  • O
    Oregon Steve
    Down 2% after hours
  • T
    The Truth
    Geezer: I don't think stock buyback moves the needle. Higher dividend do help a little, because it is a strong evidence of long-term management confidence on the business.

    The key problem is that Charlie Chan successfully created doubt on SIMO's ability to sustain growth in 2022, and he did so w/o facts or market intelligence. Why would he want to depress SIMO share prices? I don't have an answer, but I have a few suspicions. He has a higher rating on Phison, which grew much slower in Q1, and is losing merchant market share to SIMO. But Phison is traded in Taiwan which provides him better legal environment to "make money" (away from SEC). Since SIMO is followed by Taiwanese investors, I would not be surprised that he downgraded SIMO to direct their attention to Phison and in benefit from it. For all we know, it is probably much easier for him to get kick backs from Phison.
  • P
    Powerpc_marker
    SIMO is very undervalued. It has 10$ cash per share and no debt and will earn close to 6$ per share next year.
  • G
    Geezer31
    WDC just announced a new lineup of advanced gaming NVME PCIe SSDs. The press release doesn’t discuss the controller. Previously when WDC used an internally developed controller they would mention that in the press release. These new SSDs don’t say anything about the controller, so I take that to mean perhaps it is made by SIMO. The reviews over the next few days should make it clear….
  • m
    mayslakeman
    Fascinating watching high dividend payer cash cws selling off this week, while high fliers nose-bleed value growth from last year likes CRWD, DDOG, PINS coming back to life. Money sloshing around the market.
  • P
    Powerpc_marker
    Global top-5 notebook brands, not including Apple, expect demand for notebooks to stay robust in the second half of 2021 and believe notebook shipments are unlikely to experience a major drop in 2022, according to sources from the related upstream supply... DIGITIMES
    Monday 31 May 2021
    Bullish
  • G
    Geezer31
    SIMO presented at a Cowen virtual conference today. A link to the webcast is on their web page under Investors. Not much new, but they did indicate they’re not currently buying back shares, and seem likely to increase the dividend in Sep.
  • G
    Geezer31
    Holy moley! Someone bought 16;300 Sep $55 puts! That’s 1.6 million shares worth of options. And they’re puts!

    We’re doomed!!
  • P
    Powerpc_marker
    Lenovo, HP and Dell, with a combined PC market share of 63%, reported strong quarterly earnings last week due to a "robust" PC end market demand and they expect strong PC demand for the rest of the year, PC end market strength is good for SIMO.
    Bullish
  • P
    Powerpc_marker
    About 800000 short shares require to cover. SIMO will fly to above 100.
    Bullish
  • O
    Oregon Steve
    Don’t believe paid shills that tell you this company has a 50% rate. For the period from 2017 to 2020, the company grew sales by a whopping LH meager 3% - less than 1% annual growth. Shrinkage is just around the corner.
  • y
    y
    The analyst's conclusion is partially true. Simo's future growth is really in the enterprise, and co mgmt recognizes this. The chip business is cyclical, and Simo never grown 40+% for 2 consecutive years. So it bounds to slow down. The company is quite certain to reach $1B so it should show growth in 2022 too. I think it will grow in 2023 as well given low end phones haven't gotten 5G capabilities yet. Hopefully the company cracks the enterprise business some time next year.