My mid year synopsis of GIG
GigOptix
GIG (was GGOX) (market cap $0.058B)
GigOptix is a high tech electronic component supplier to high capacity telecommunication applications. They make the electro-optical switches that allow for high download speeds, high bandwidth. Computers and electronics operate on electricity, but much of the information on the internet is carried by light through fiber optics. Electro-optical switches connect the two. They do so with a mix of technologies, though the one I am most familiar with is that associated with Lumera, a part of GigOptix through a merger a few years ago. Lumera's technology allows the switching to happen within a material which means fewer moving parts, which means faster switching, lower power requirements, fewer failures, etc.
The company has been quietly increasing revenues and is trading at price/sales and price/book of less than 2. I expect high-tech companies with little competition to trade at much higher multiples, especially when they are growing and are backed up by impressive patent portfolios that have extensive auxiliary applications (electrically steerable antennas without moving parts, biolabs on a chip, etc.).
The stock has recently risen from delisting to be traded on the AMEX under GIG.
I think GigOptix has much in common with F5 and that GIG has much in common with FFIV. Both companies worked within esoteric aspects of the internet backbone that are only appreciated by techies, and techies demand high-quality, high-speed, and high-reliability. FFIV's history is impressive and little known. GIG may follow a similar track. Unfortunately, there is a large difference in transparency. F5 was very open about their business, its prospects, and its challenges. I've never met a more impressive CEO. GigOptix is operated with much less transparency. There were few press releases, though that is improving. The discussion boards are almost empty. And it isn't local so I can't attend the stockholders meetings to meet the management.
DISCLOSURE LTBH of LMRA since 2004 and may have time to buy more at these low prices as they make progress and if I have discretionary cash (which I don't - let me check my lottery tickets). Unfortunately, I may have to sell if I can't find a job or sell my house.
(I've also collected links to the other discussion boards and my other stocks over on my blog trimbathcreative.wordpress.com . There is also a longer description of history between GIG and me on my blog. ) |
