Semtech Corp (NASDAQ:SMTC)

CAPS Rating: 3 out of 5

The Company designs, develops and markets a range of products that are sold principally to customers in the computer, consumer product, communications and industrial markets.

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Member Avatar nassariuscapTA (33.85) Submitted: 3/13/2013 3:23:02 AM : Outperform Start Price: $33.05 SMTC Score: -50.02

s

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Member Avatar lonewulf47638 (47.33) Submitted: 2/3/2010 1:15:03 PM : Outperform Start Price: $15.32 SMTC Score: -9.46

eVEN WITH HIGH p/e THIS ONE WILL DO WELL. ECENT UPGRADES BUY MANT\Y FIRMS.

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Member Avatar srk85 (< 20) Submitted: 1/29/2009 5:43:54 PM : Underperform Start Price: $12.31 SMTC Score: +25.63

Overvalued compared to industry. Growth-adjusted PE is nearly twice the semiconductor average.

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Member Avatar GreedisGood300 (< 20) Submitted: 3/24/2008 4:12:22 PM : Outperform Start Price: $14.91 SMTC Score: +24.22

jump on the bandwagon

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Member Avatar pdseeker (< 20) Submitted: 1/23/2008 5:54:00 PM : Outperform Start Price: $12.62 SMTC Score: +56.20

Product innovation and improvements to process and GM will drive growth.

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Member Avatar skyops (< 20) Submitted: 1/3/2008 9:04:33 PM : Outperform Start Price: $14.41 SMTC Score: +39.23

citi 08

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Member Avatar capitalgorilla (93.58) Submitted: 11/1/2007 10:49:37 PM : Outperform Start Price: $16.70 SMTC Score: +20.63

Semtech is a semiconductor turnaround battered by stock option skandal in 2006/07 which is resolved followed by a board of director and management restructuring. Manufactures and sells the "black magic" of Analog semiconductors yielding good margins.
High R&D investments, solid new products out and coming out should gain big traction by End 2008.
Q3 next month should be a record quarter too with higher EPS than Q2 or as I guesstimate , above target.
250M$ in size working in a >>7Bn market there is much room to grow and reach $1bn, especially in the faster growing power management semiconductor market.

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Member Avatar Kduser (77.43) Submitted: 9/5/2007 2:26:20 PM : Outperform Start Price: $17.53 SMTC Score: +7.88

Analog Performance

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Member Avatar NetscribeSemiCdr (58.17) Submitted: 1/22/2007 6:58:31 AM : Outperform Start Price: $12.92 SMTC Score: +58.01

Semtech, based in California, is one of the industry's leading suppliers of mixed-signal and analog integrated circuits, with a specialization in power management, protection, and timing solutions. The company's integrated circuits (ICs) are employed in communications, computer and computer-peripheral, automated test equipment, industrial, Gaming, Military and other commercial applications.

Semtech strategy has been to focus on the high margin analog market, projected to be a $50 billion industry in 2009 growing at a CAGR of 11%. Moreover, the analog segment has the advantage of having long product life cycles, low capital requirements. Also the company is expected to reap benefits from manufacturing being outsourced to new facilities in China. The company sees huge potential in mixed-signal market driven by demand from diverse application areas and expected to double in size by 2010.

Protection business currently contributes around 40% of the sales revenue and still remains a bright spot. Growth in the sale of notebooks, LCD TVs, cell phones and communications equipment with protection products had driven sales to record levels. The company had been busy in the recent quarter with 21 new products introduced and 617 new design wins balanced across all products groups and regions. Military, medical, and other industrial segments were the growth drivers for the recent quarter and expected to do so in the future also.

The operational efficiency has been good with positive bill to book ratio and a lead-time being lean of about 4-8 weeks. The Financial position of the company is good with gross profit margins above 55% over the past 5 years and strong cash flows supported by lower capital spending.

Semtech currently trades in line with its peers and has it own set of problems ranging from market share loss with respect to the power management products and options over hang. However there has been a total transformation in the work culture and change being forced in the top management. However the new leadership has earned the credibility, respect and confidence of the investor which makes the investment worthy.

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