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SpaceMonkey01 (47.74)

Two Tech Picks: HIMAX and Silicom

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May 27, 2008 – Comments (2) | RELATED TICKERS: HIMX , SILC

Just thought I'd blog about two tech picks I like-- Himax and Silicom. I think they are great stocks being undervalued by the market. They are stocks highly rated by top fools trading at low P/E multiples (especially for tech stocks), no debt, lots of cash, and strong growth drivers. They are small/micro caps that are thinly covered by analysts. I won't go through all the nitty gritty details, but I'll give you a  thumbnail and let you do the DD.

 

Himax (HIMX): Taiwanese semiconductor manufacturer that makes chips for LCD screens of various sizes and they are making a big bet that LCOS technology will take over LCD and plasma as a superior technology for these flat screens. THey are also pioneering (in concert with 3M), mini projector technology for mobile devices, allowing you to project images and movies from your cell phone onto a wall.In a few years, this may be as standard as cameras are on cell phones today. No debt, lots of cash, and pays a dividend (though seems to be at management discretion and not regular yet), but unusal for a growth company that has only been around a couple years. THey just declared a dividend for those holding as of 16 June.  Trading at a 7 P/E ratio.

 

Silicom (SILC) is a microcap Israeli server card manufacturer specializing in server bypass cards that optimize efficiency of servers. THey sell primarily to OEMs for incorporation to their products, rather to end users. Last quarter's earnings were inline and management guided inline but yet they took a 30% haircut based on an analyst downgrade--- the one analyst that follows the company. No debt, lots of cash, trading at a 8 P/E ratio. 

 

Anyways, I think they are worth a look. I am long both HIMX and SILC.  

2 Comments – Post Your Own

#1) On May 29, 2008 at 9:10 AM, binv271828 (< 20) wrote:

Good Call on HIMAX, man that was a nice jump yesterday!
I also like SILC a lot also, too bad they are not CAPS rateable right now. 

Nice finds.

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#2) On June 03, 2008 at 8:31 PM, skat5 (72.67) wrote:

Less than a year ago there was a big drop at HIMAX and the ususal litigation that follows these days, about management deceiving stockholders.  Important to keep in mind that these foreign firms often lack transparency and can be run for personal enrichment of a controlling family rather than the stockholder (not like here, LOL).  That being said, HIMX has a good business in components for LCDs, which I predict will be a bright spot in consumer discretionary as HDTV becomes king in 2009, with the LCD set being the affordable choice for the majority (less expensive, not too heavy, choices for every pocketbook).  The bet on nextgen displays is a big risk as well as a big potential reward.  But that's tech for you; stay with what you know and obsolescence will destroy you, bet the company on a technology that fails, and suffer the same fate. 

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