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.
GigOptix
GIG (market cap was $0.054B mid 2015 is $0.135B EOY2015)
GigOptix builds high speed electro-optical switches for communications networks. If you like a fast Internet, you're encouraging the use of their products. GigOptix is also a small conglomerate, a company that is building itself up through mergers and acquisitions. Those mergers and acquisitions have complicated the company's financial reporting, which may have discouraged some investors. The company was also below a $100M market cap until recently, which may have discouraged some investors. The technology is technical, difficult for many to understand, which may have discouraged some investors. Recently, however, they became profitable (even according to GAAP). The stock has appreciated about 150% in the last six months with a Price/Book of about 2.1 and a Price/Sales of about 3.3 which suggests room for growth. In 2016, company sales are expected to grow 21.5%, with a history of under-promising and over-delivering. The stock may command a premium. My rule of thumb is a Price/Sales of 6 for innovative products that have little competition. GigOptix does have competition, but few firms can produce the highest speed switches. As the speed and bandwidth requirements rise, GigOptix will possibly have fewer competitors because of some of their technical advantages (e.g. switches without moving parts.) I am also intrigued by the recent comment that their products may be included in consumer electronics, but they haven't revealed a product or product category.
I continue to hold, and (in true investor form) wish I'd bought more when I had the chance and choice. (This Investors Dilemma MVIS V GIG - trimbathcreative.wordpress.com
DISCLOSURE LTBH of LMRA since 2004. Holding because I have enough shares to positively impact my life, but not so many that I feel too exposed to risk.
(I've also collected links to the other discussion boards and my other stocks over on my blog trimbathcreative.wordpress.com |
