As the larger semiconductor industry continues to bump along with little-to-no organic growth, Microsemi (NASDAQ:MSCC)
too has found its organic growth opportunities somewhat limited in the
near term. The good news, though, is that the company has been making
real progress with cost-cutting and debt repayment, putting it in a good
position to reap meaningful operating leverage and profit growth when
underlying demand improves.
Microsemi's quarter was
pretty nearly on target with my model, so my post-earnings changes
aren't significant. The shares have done alright over the last year,
matching the SOX index and beating the major indices, but I don't see
major upside left based on the fundamentals. I do think there is a
possibility that the growth outlook improves toward the end of the year
(and higher revenue drives a higher fair value), but with a 25% move
since my last article, I regard this more as a "quality hold" to buy on pullbacks than a must-buy at today's price.
Read the full article here:
Efficiency Trumping Growth At Microsemi For Now
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