I've followed the ups and downs of OmniVision Technologies (OVTI)
for about a decade now, and the company has never managed to break out
of an intensely cyclical pattern driven by product launches and
competitive pressures. I have no expectation that that will change, as Sony (SNE)
has proved a fierce competitor on the high end while a bevy of Chinese
rivals compete for the low-end of the CMOS image sensor market.
If
investors can accept OmniVision for what it is, there may yet be
trading opportunities to consider. As of this writing, the shares lie
ever so slightly below tangible book value and this is a company that
has generated positive net free cash flow and returns on assets over the
past decade. Investors who can stomach the risk of a decline back to
the $12 to $13 range may want to take a closer look, as even a discount
to past price/book multiples suggests a fair value in the $18 to $20
range.
Read the full article here:
Does The OmniVision Roller Coaster Have Another Climb Left In It?
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