Ashraf Eassa
Long/short equity, contrarian, independent research, tech

Silicon Motion Could More Than Double In 2013


Silicon Motion (NASDAQ:SIMO) is a small-cap fabless semiconductor company that develops three major products:

  • Mobile Storage (68% of net sales)
  • Mobile Communications Products (28% of net sales)
  • Multimedia/Mobile Graphics Products (4% of net sales)

While the company has seen extremely nice revenue and profit growth over the last several years, the stock now trades at extremely cheap valuations on a P/S, P/E, and PEG basis. The company also has a very clean balance sheet ($146M in cash, no debt), which further adds to the value proposition of the stock at the ~$14/share level ($451M market capitalization).

There are a number of reasons that the stock could be trading as cheaply as it does:

    Market inefficiency misprices the...
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