Even though I typically invest with a multi-year horizon, I am not going to pretend that I don't notice short-term moves in my stocks or that they don't bother me. To that end, then, I'm not all that confident that the Street is going to love the results that Microsemi (Nasdaq: MSCC) just delivered.
Microsemi delivered revenue of $184.4 million, up 22% from the third quarter (and boosted by acquisitions). That's a little bit above the average guess that was out there. Although Microsemi is relatively pro-investor, they don't give a lot of info in the release, so I'll need to listen to the call to get more details on the topline performance.
Below the revenue line, Microsemi did alright with profitability Gross margin of of 53.6% (non-GAAP, of course, as this is a tech company) was likewise firmly in the midst of most analyst expectations, and the operating margin of 23% was just a few tenths of a percentage off the median. All in all, Microsemi matched the average estimate. Likewise, the company's guidance for next quarter was consistent with prior expectations.
Who knows what the market will choose to make of it? I consider it a solid quarter from a defensive and often-overlooked semiconductor company. Others may see the lack of a beat-and-raise as a sign to move on to more exciting territory (though the idea of those investors getting into MSCC in the first place is a little amusing).
I intend to write something a bit more insightful after listening to the call and mulling it over a bit. For now, though, I think I'll probably keep my fair value at $28.75, and I would continue to BUY these shares. It's not a go-go growth name like Qualcomm (Nasdaq: QCOM), Broadcom (Nasdaq: BRCM), Cavium (Nasdaq: CAVM) and so on, but it's a well-run business that is undervalued by the Street.
Disclosure: I own MSCC shares
No comments:
Post a Comment