|My EOY review of GIG|
INTRO Here's my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.
GIG (market cap was $0.028B is $0.033B)
GigOptix makes very high-end electro-optical switches that are key to the ever-increasing bandwidth demands of the Internet and telecommunications industries. I am particularly interested in their highest speed switches, which if I understand correctly, have very few in any moving parts. The products are relatively new but should now have enough time in production environments to sell themselves.
To me, this is similar to the situation the f5 Networks (FFIV) found itself in though arguably in a larger market. F5 makes high-tech communications equipment, but wasn't noticed because it was much smaller than Cisco (CSCO) and advanced enough that it was harder for analysts to understand. FFIV quietly went from under $3 to over $130. After a more than ten-fold increase I sold, and used the profits to make a large down payment on a small house. If I'd help FFIV a few more years, I could probably have bought the house for cash. So it goes. And so it may go for GIG.
My cautions about GIG are that the company doesn't announce much and that the market may not be large enough to create another FFIV story. Yet, the company's Price to Sales ratio is a quarter what it would be for most high-tech innovators, which suggests at least a four-fold possible upside especially considering their increasing revenue. Growth and publicity could encourage a premium.
DISCLOSURE LTBH of LMRA since 2004. (An earlier post includes a description of how GIG came from GGOX which came from LMRA which came from MVIS which came from UW. trimbathcreative.wordpress.com
(I've also collected links to the other discussion boards and my other stocks over on my blog trimbathcreative.wordpress.com