Power Integrations, Inc. (NASDAQ:POWI)

CAPS Rating: 3 out of 5

The Company designs, develops, manufactures and markets proprietary, high-voltage, analog integrated circuits for use primarily in AC-DC and DC-DC power conversion in the consumer, communications, computer and industrial electronics markets.

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Member Avatar ScalaAnalyst (36.39) Submitted: 8/22/2013 11:17:38 AM : Outperform Start Price: $50.73 POWI Score: +6.96

POWI manufactures IC and other electronic components used in high voltage power conversion. They have an entire array of products for mobile device chargers, consumer appliances utility meters liquid crystal display monitors and stand by power supplies for desktop computers and TV. Many of their devices utilize technology that reduce standby consumption in high-power applications by eliminating power waste when not in use. They are based in San Jose, CA.

Ownership:

Insiders only hold 2% of the company. I would have liked to see more. But at least management has some interest in their company.

Competitors:

They only have 526 employees, compared to FCS with 9,077 IFNNY with 26,210 and STM with 48,460. With these 526 employees they are able to generate a Quarterly Rev Growth (yoy) of 0.15 compared to -0.01, 0.03 and -0.05 respectively against these other guys. That is quite good. The have the highest Gross Margin (ttm) of 0.51 with only an Operating Margin (ttm) of 0.05. With a PEG of 1.82 they are a little high but have plenty of room for growth.

Their Debt/Equity Ratio is zero so they are using their own money to grow the company. They do have a Dividend Rate of 0.32 providing 0.61% annual yield. Which isn't huge, but a little icing on the cake.

Their sales growth is only 2.20% and with a income of -10.11 Mil they are a little down in the dumps, but hopefully they will turn this around. They are trading near their 52 week high of 55.22/sh trading today at 51.80/sh So, maybe a wait and see approach would be the best.

Earnings:

What impressed me was their Earnings. They have managed to beat the street estimates consistently from 4% to as high as 11.76%. The analysts are consistently increasing their estimates to keep up, but POWI manages to keep the ball rolling ahead of them. The company should out perform the S&P over the next 5 years by at least 15%. If they are able to do this then it would favourable in anyone portfolio.

Income Statement:

Total Revenue has increased steadily, and Gross Profit has grown between the years 2008 and 2012. Operating Expenses had increased slightly, and it would be nice if they could keep it more in control. Because of their increase in 2012 in Operating Expense their Operating Income has faltered a bit, which has lowered their Net Income to -34.4M for 2012.

Looking at the last two quarters for 2013, it appears that they have brought their Operating Expenses under control, which is favourable. If they can continue to do so, then it will be a bright years for 2013.

Balance Sheet looks quite healthy. The total of the Liabilities and Equity has faltered a bit in 2012, again, but the the last two quarterlies for 2013 have bounced the company back. So for the money, these guys look like a good investment.

So, I would come in at 51.00/sh rethink it at 40/sh, and probably sell out at 100/sh in the next 5 years if they met at least 18% growth. But if they did better, then it would be easy to hang on to them for even longer.

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Member Avatar simicd (35.90) Submitted: 7/25/2010 11:03:40 AM : Outperform Start Price: $35.45 POWI Score: +4.74

Watch for the pop when they report the earnings in August

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Member Avatar gse1616 (< 20) Submitted: 7/15/2009 11:21:31 AM : Outperform Start Price: $24.50 POWI Score: +48.57

this company is taking market share away from everyone.

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Member Avatar donradcliffe (44.72) Submitted: 6/29/2008 1:08:50 PM : Outperform Start Price: $30.23 POWI Score: +52.86

management is a problem, but their product has great growth opportunities

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Member Avatar mrbait2 (< 20) Submitted: 6/16/2008 9:40:49 AM : Outperform Start Price: $32.00 POWI Score: +49.56

energy of the future

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Member Avatar TheQuirkMan (< 20) Submitted: 5/1/2008 3:54:50 PM : Outperform Start Price: $31.16 POWI Score: +59.84

a hunch

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Member Avatar stockguy07 (< 20) Submitted: 4/28/2008 4:44:44 PM : Outperform Start Price: $31.04 POWI Score: +59.14

highlighted: IBD New America. LED play????

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Member Avatar knightcry (22.25) Submitted: 4/10/2008 10:21:21 PM : Outperform Start Price: $30.87 POWI Score: +55.66

Can't go wrong with this one.

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Member Avatar LivingLegend007 (< 20) Submitted: 12/14/2006 6:47:56 PM : Outperform Start Price: $24.20 POWI Score: +115.26

Stock up 80% since 8/1. Small market cap. 1 yr. price target $36

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Member Avatar billybleu (42.40) Submitted: 12/7/2006 4:30:40 PM : Outperform Start Price: $25.72 POWI Score: +98.55

soon to be a world leader

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Member Avatar XTMFJordan (74.21) Submitted: 6/14/2006 11:34:33 PM : Outperform Start Price: $16.66 POWI Score: +207.69

POWI is currently being hammered due to being caught up in the broadening "back dating" scandal. They definitely should be taken to the woodshed for engaging in this odious practice. But beneath gunk of the back dating scandal is a solid business with a strong future. POWI is the leading developer and manufacturer of semiconductor based power supplies. For a small incremental cost, POWI's products substantially reduce the power usage of those various "vampire" devices around your house or business.

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