This company has been a perennial underperformer and therefore a disappointment to me. The stock has rallied off its low of $0.70 on December 12th to around $2.85 presently (300%+ gain). Balance sheet concerns (the company has levered up in recent years backing off its debt against a large cash stash...garnered when it went public and not from operating profits) and evaporating market demand for its products undercut the company, leading to the stock falling from a high of $7.46 in October 2007. Technically, the current level ($2.85-$3.15) forms a resistance barrier, with the next resistance barrier around $4. Personally, I think there are assets here that are worth more than $3, but I am not sure whether the company will ever get back in a position where it can demonstrate that fact. To their credit management has been chopping into the cost structure (belatedly...boy is it frustrating to watch tech companies wallow in a state of cost structure denial, just because they have the cash to do so) and is putting the company in a position to take advantage of any improvement in its markets. I'm just not sure those improvements are going to come along any time soon. Nokia might be interested, but they've got their hands full with their own problems right now. Apparently RFMD have developed a new process for improving the efficiency of producing LED bulbs (certainly sounds promising, but still at least two years away from commercialization, and it is unclear whether they own the intellectual property on it). It seems that just as you are about to pull the trigger and sell something, some new piece of "exciting" information crops up to defer the decision (hope springs eternal). Stock is undervalued relative to peer SWKS, but not so against other peer also-rans TQNT and ANAD. It has the cash to survive and is getting its internal house in order. Much will depend upon the external opportunities in extending its RF chips beyond handhelds and if the China hope is overdone, and whether there is any value in the LED opportunity.
Disclaimer: At the time of posting, I had a professional position in this stock but sold it before the end of the trading day.
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