Cirrus Logic, Inc. (NASDAQ:CRUS)

CAPS Rating: 4 out of 5

The Company develops precision analog and mixed-signal integrated circuits for a range of consumer and industrial markets.

Recs

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Player Avatar ScalaAnalyst (20.87) Submitted: 1/28/2013 7:35:59 PM : Outperform Start Price: $27.44 CRUS Score: -32.80

I believe the have an earnings/bookvalue which is quite competitive. (earnings (ttm)1.61/8.02 = 0.201) or ((current eps) 2.34/8.02), which is quite nice. This company has a debt/equity Ratio which is 0.0; So they do not have the overhead of a financial debt payments taking away from their earnings. Although this is has a market cap of 1.86B I doubt that they will be a take over target, but they do have some growth potential.

Most of the analysts have been upgrading their next earnings performance from 0.68/sh to 0.97/sh in the last 90 days. Also for the year ending they have increased their annual earnings performance from 2.37/sh to 3.18/sh.

All in all, the earnings growth rate for this company is quite large. They have been hard hit this last year, coming down from their high of about 45/sh just last September, 2012 to their current price of 28.86. So there is some room for upside price growth with a current PE of 12.34.

Looking at their past earnings it appears to be almost a dream come true. From quarter to quarter their growth is quite strong. They have either hit the street estimates dead on or exceeded them in the last 5 quarterly filings.

I just hope that they can keep it this up. Because of the problems that Apple has reported, which really were minor, seeing that they simply missed earning and sales by a few percent. I believe this stock along with Apple just suffered a little bit much in the market. This was probably due to the harsh media reports. My only concern is that Apple is about 91% of their business. I believe they should focus on continuing to provide sales to Apple. But try to generate sales to others, so that they are not as dependent on Apple for their income. I imagine that their sales teams will be ramping up to find other avenues for their product or face always riding on the coattails of Apple.

Personally, I don't track Apple, I believe that they are just a little too big for them to double in size. The stocks I target have a capitalization between 300M and 2B. So, AAPL has a Market Cap of 422.42B. This makes it difficult for me to believe it will double in four or five years. Also, I also like to target stocks that have what I call a 'buy-out potential' and at 422.42B there are not many organizations that can afford to buy AAPL out.

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