Cavium Networks, Inc. (CAVM)

mrindependent (98.90) Submitted: 7/9/2009 9:45:59 AM : Start Price: $16.60 CAVM Score: +2.45

Cavium networks makes "highly integrated semiconductor processors". This tiny company has generated rapid sales growth during the past 5 years, but has not been equally successful at generating profits. The result is that Cavium is a money losing company selling at 5.3 times book value in an industry with significant overcapacity.

ddebo44 (53.30) Submitted: 4/24/2008 10:20:09 PM : Start Price: $21.40 CAVM Score: +13.51

The technology sector continues to be hot. This company deals overseas where emerging markets and upgrading continue.

TechGooRoo (24.67) Submitted: 11/2/2007 12:43:23 AM : Start Price: $28.98 CAVM Score: +5.79

Let's review some vital data:

- Market cap: $1.15B
- Revenue for the trailing 12 months is about $48M.

That's right, they're currently trading at 24x revenue. That's simply absurd. If some 800lb. hardware company wanted to buy Cavium, they'd almost certainly wait until it dropped at least to the 10x range, unless it was a very strategic acquisition and there was competition.

Even if you assume similar revenue growth for the next quarter, to $16M, that's $54M for all of 2007, and still 21x revenue.

3rd quarter was the first quarter where Cavium was profitable. They made $186K of profit from product, the rest was from interest income on the $100M they received when they went public in May. That's $1.3M in interest income.

Given the Q3 net income of $1.31M, they'd have to double their net income for the next three quarters to gain a TTM P/E 58.

While Cavium looks like a fine company, the stock price is way inflated.

midas784 (82.71) Submitted: 7/26/2007 1:23:03 AM : Start Price: $27.55 CAVM Score: +3.17

Another bloated pig - market cap of $1.3 billion and less than $40mil 2006 revenues... Pig Pig Pig !!!!

Kduser (82.89) Submitted: 7/19/2007 3:40:58 PM : Start Price: $26.29 CAVM Score: +2.92

They have working IP.

farmerellis (95.48) Submitted: 7/12/2007 12:32:25 AM : Start Price: $26.24 CAVM Score: -1.68

Its a long way down.

kanantha (63.52) Submitted: 7/8/2007 9:09:33 PM : Start Price: $23.64 CAVM Score: +10.69

Good customer base and innovative in what they are doing - all good qualities for me.