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Himax (NASDAQ:HIMX) has been on a parabolic run since March, and for a good reason. The recent pullback to $7/ share from $8/ share closely follows the chart pattern it has ridden since it was at $2/ share. This recent pullback to $7/ share is a great entry point, and if it follows the pattern it has repeated time and time again, $7/ share could easily become the launching pad to $9/ share. But be ready, because it will happen in the blink of an eye if it stays true to the chart. This recent pullback and consolidation is a predicable one, consistent with the chart pattern, and creates a perfect entry point into Himax.

HIMX is growing solidly, and has shown this by beating Q1 earnings estimates, despite the fact that last quarter was the slow quarter for most Asian companies. Himax also expanded its profit margin by 5%. This stock's growth should only continue with the massive amount of news catalysts on the horizon. There will be 5-- yes 5-- investor conferences coming up, along with the dividend announcement. Additionally, any surfacing of a Google (NASDAQ:GOOG) Glass contract ought to propel this stock into the teens very quickly.

According to Daily Finance, Himax just recently announced contracts with Sony (SNE) and Microsoft (MSFT) to enhance both companies' devices' capability and resolution. Furthermore, HIMX driver panels-- small, medium, and large-- are currently the best on the market. That being the case, the increased demand for the best resolution in smartphones and tablets has created a "resolution race" among major manufacturers, and it has translated into accelerated sales of Himax's small and medium drivers. The desire by companies to have the best resolution on the market is only growing, and it is becoming increasingly competitive. This trend will translate into higher sales for Himax in the future as the company's technology provides electronics manufacturers with an edge over competitors. In Q1 of 2013, 50% of Himax's revenue came from the sale of small and medium sized panel drivers, and this was up over 25% from the last quarter of 2012. In anticipation of continued sales jumps, Himax has significantly raised its inventories by over 20 million in Q2 to meet the expected increase in demand.

I am confident that this stock could very well run, just as Uni-Pixel (UNXL) did. In just six months, Uni-Pixel ran over 800% into the low 40's due to the hype surrounding the potential of its UniBoss and Diamond Guard technologies. It ran this rapidly, while still posting a loss of $1.11 per share on revenue of $76,200 for all of 2012 (according to the Q4 2012 earnings release on February 26, 2013). Himax has just recently gained similar attention due to its possible association with Google Glass and its cutting edge LCOS technology. In this regard, these two companies are very similar, but unlike Uni-Pixel, Himax posed a total revenue of 737 million for 2012 (according to Q4 2012 earnings release on February 7, 2013) and a very solid balance sheet. This factor makes a run like we saw with Uni-Pixel not only very possible, but sustainable. With revenue of 3 quarters of a billion dollars and the possibility of landing a major contract with Google on the radar, a run like this seems inevitable.

HIMX is a very solid stock that deserves the run it has been experiencing as of late. It has gained a lot of attention with the hype of Google Glass and its possible association with Himax. For the short term, any news concerning this possible affiliation with Google, whether it be good or bad, could affect the price of the stock very strongly. Although we could see a pullback if Himax did not land the partnership with Google, the Hype surrounding Glass and the attention it has brought to Himax has uncovered a diamond in the rough. In the long term this stock will continue to see continued growth due to its solid and expanding business plan, however we could see short-term volatility on account of the hype concerning Google Glass. For the long term investor, the payment of a stable 0.83% dividend by Himax is also a great sign, and that could be doubled in the upcoming dividend announcement. This dividend is an encouraging sign for a sub-$10 stock. Any increase in this dividend is a strong signal that things are only looking up for this stock, and that the company is financially very sound.

As previously mentioned, Himax is financially very well off and this explains the steadily growing dividend payment. According to the Q1 Earnings Report, Himax ended March 2013 with over $170 million in cash and cash equivalents, and with inventories that were valued at $138 million, that figure is up over $20 million from this time last year.

Management stated in the Q1 report: "We raised the inventory level to accommodate for the expected increase of shipments during the second quarter. " This is a terrific sign for Himax. As explained above, this signals preparation for the anticipated large increase in sales of the small and medium sized drivers, which results from the growing competition by tech companies to increase resolution, usability, and also beat competitors in the process.

Jordan Wu, CEO and Founder of Himax, left a great impression with the investors when he concluded the earnings call with:

"In summary, we are pleased with the top and bottom line performance of the first quarter of 2013 when, during a low season period, we achieved both margin expansion and profitability improvement. We will continue to execute our strategy and are excited about further growth opportunities ahead of us."

No doubt, its skilled management is setting Himax up to become a large-cap stock and a known name in the semi-conductor and tech industry. The impressive Q1 results, which beat expectations despite the slow quarter (due to the multitude of holidays that occurred in Asia in Q1), lay the groundwork for Q2-- and in my opinion, Q2 should blow estimates out of the water. Management has sought contracts with blue chips such as Sony and Microsoft and has gotten them (source hyperlinked in 2nd paragraph). Not to mention that Himax has sold to Apple (AAPL), establishing a relationship and putting its foot in the door as a primary candidate to be used by Apple for the rumored Apple wrist watch.

Lastly, as I stated earlier, with its superior optical technology, Himax is a primary candidate for the Google Glass contract. Although landing Google Glass would propel this company's climb into a large cap, without it Himax is still a very sound and profitable company. Himax has been positioned well by management to grow solidly, and has established relationships with 4 of the most prominent tech companies in existence. This is a very sound company and is a solid investment with minimal risk and massive upside potential.

Conclusion:

Himax will see even larger sales in Q2 and most likely a massive guidance beat. In the short term, it has many planned news catalysts, consisting of 5 investor conferences and the upcoming dividend announcement. Management has set Himax up for continued growth regardless of landing the Google Glass contract, and the demand for the LCOS and driver products produced by Himax is increasing as of late. Himax is solid financially, and this is displayed not only by it currently sustaining a solid and growing dividend, but also because the company announced a $20 million stock repurchase program. Add the potential of landing the Google Glass contract, or any relationship between the two companies, and HIMX will likely be propelled into the teens very quickly. In the short term, the stock would take a hit if HIMX did not land the Glass contract, but because of Himax's sound fundamentals, landing this contract will only be a catalyst to the growth which we can expect to see, with or without it.

Source: Himax Technologies: A Blue Chip In The Making

Additional disclosure: I have no positions in MSFT, SNE, or UNXL and no plans to initiate one.