Seeking Alpha: Is PMC Sierra The Way To Play Storage And Carrier Spending?

On the surface at least, PMC-Sierra (PMCS) is in some of the right markets. Enterprise storage continues to score well in various CIO surveys of spending priorities, while carriers are stepping up their plans for metro/access network spending and wireless backhaul. Not only are the end-markets looking better in many cases, but PMC-Sierra also enjoys good share and growth prospects from WinPath and 6G/12G transitions.

It takes more than a good top-level story to drive a good stock performance, though, and I'm not completely sold on the value proposition for PMC-Sierra. I do believe storage and carrier spending will accelerate, and the possibility certainly remains that the company can outperform current expectations for 2014 and beyond. While these shares could move as much as 20% if PMC-Sierra's 2014 outlook doesn't worsen and the Street goes back to historical multiples for the company's comp group, the core DCF valuation doesn't suggest quite as much upside.

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Is PMC Sierra The Way To Play Storage And Carrier Spending?