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Nice pullback. Rumor there being dropped from the Ipad and Iphone. If true, its a disaster. If not, this will be back at the new highs and then some. $25-$30 I bought the Dec. Calls
Posts: 4381 | From: houston | Registered: Mar 2006
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•Click Here Now Yesterday, I reported on rumors coming out of Taiwan that Apple (Nasdaq: AAPL) might be changing its hardware designs radically. That was based on rumors, but believable enough to send Cirrus Logic (Nasdaq: CRUS) to the market's doghouse for allegedly losing its prized audio chip contract with Apple.
Today, we know better. Analysts with the ability to read Mandarin Chinese have clarified the original article, which turned out to focus on how Qualcomm (Nasdaq: QCOM) would benefit leading chip foundry Taiwan Semiconductor Manufacturing (NYSE: TSM) if a CDMA-enabled iPhone ever comes to pass. That article mentioned Cirrus and others only briefly, and actually only to point out that they probably would stay in Apple's good graces. The fact that Cirrus' department of corporate communications felt the urge to notify me of this re-reading tells me that there's probably something to it.
Cirrus, for one, largely recovered later in the day but has sunk a little further since then; probably just the sugar high wearing off after a big mention on Jim Cramer's Mad Money show Wednesday. The bottom line is this: A wild rumor pushed Cirrus down, but reality paints a different picture. There's no reason to sell Cirrus Logic or AT&T (NYSE: T) today, nor would you be wise to buy Qualcomm or Marvell Technology (Nasdaq: MRVL) based on their landing large roles in Apple's next generation of iPhones. If you bought Cirrus on the negative rumor, you should be able to make a nice profit if and when actual news of the company staying iPhone-bound comes out. Funny how that works.
What remains is the separate rumor putting Samsung OLED screens in iPhones next year to the detriment of Samsung's own smartphones. That possibility has yet to be debunked and may present an actual catalyst for OLED technology licensor Universal Display (Nasdaq: PANL). Then again, you hardly need an excuse to love where that stock is positioned today, do you
Posts: 4381 | From: houston | Registered: Mar 2006
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In Cirrus we trust No company has benefited more from the iPhone craze than Cirrus Logic, which has seen a meteoric 600% rise in its stock price since January 2009. Cirrus provides the audio codec -- the microchip which allows the phone to conserve energy by rerouting audio functions through its chip instead of the main processor.
Apple has accounted for 34% to 39% of Cirrus Logic's quarterly revenue over the last year. Thanks to Apple, Cirrus has managed to turn quarterly losses into healthy profits, and has actually grown its gross margins from 52% to 57% in the last year. If you back out the company's $2.10 of cash on hand, you get a company trading at less than 11 times forward earnings and expected to grow this year by 69%.
Apple has no chance to match the intensity of the fire currently lit under Cirrus Logic shares. Despite the huge rise we've already seen, Cirrus should have plenty of room to move higher.
Posts: 4381 | From: houston | Registered: Mar 2006
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