|Sigma Designs (SIGM-NNM)|
by Capstone (6.18, Dec. 23)
Strong Buy. Strong long-term growth strategy. The company is a market leader in sectors of the burgeoning digital-media market. Sigma holds a 75% market share in the IP Video market, which is expected to reach 14 million units in 2006. Its line of semiconductors have won many key accounts recently, including being chosen by Microsoft, for sole use in MSTV, and Sony, to provide decoding for three of Sony's new Plasma Wega line of HDTVs...Sigma doesn't compete on price; it differentiates its DVD products through features that appeal to enthusiasts. The enthusiast market is expected to be around 10% of the total DVD market of approximately 120 million units per year in 2006. Sigma will be first to market with the coming introduction of its new chip, which will be able to decode the Windows Media standard.