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Cypress Semiconductor Corporation (NASDAQ:CY) is a bona fide small cap company that resulted from the hard work of its founder and CEO, TJ Rodgers, a true entrepreneur. In recent years, much of its efforts have been directed at touch screen controllers for just about everyone in tech; including renewed business with Apple (NASDAQ:AAPL). However, an announcement in September of softness in the market has resulted in the stock plummeting and there are questions about whether or not it can recover.

The text to a November 19th conference records SVP & Treasurer Neil Weiss saying the launched Programmable System on a Chip ("PSoC") 5 "…is significant in that it enables us to sell into much larger marketplaces…[PSoc5] is a $5 billion marketplace." A story from around the same time announces Cypress's one billionth CapSense touch screen controller, another PSoC product. Also contained in the news release is a statement from a research firm saying that it "Expect(s) the global market for capacitive touch-sensing controllers to post a robust CAGR of 15% through the year 2020." Though company-provided information relieves worries about the industry, there are unanswered questions about competition from firms such as Synaptics (NASDAQ:SYNA) and Atmel (NASDAQ:ATML).

Meanwhile, Cypress's equity may be attractive to some. It is up modestly after CFO Brad Buss's 15,000 share, November 21st open market purchase. A quarterly dividend of $0.11 remains in effect and renders the stock a high-yielder at 4.61%.

Though the company has also been involved in repurchasing:

Since we announced our $400 million stock buyback program in September 2011 through the end of the second quarter of fiscal 2013, we used approximately $316.2 million from this program to repurchase approximately 23.5 million shares at an average share price of $13.44. As of June 30, 2013, the total remaining dollar value of the shares that may be repurchased under the program was approximately $83.8 million (August 10-Q).

The remaining authorization is a positive for investors; however, the fact that the company has paid $13.44 on average for shares currently priced at $9.53 is a concern. Further information from the corporation's August 2013, Form 10-Q shows the decrease in Weighted-average diluted shares: after awarding stock to employees, about 8.5 million have been bought back.

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Also, the Form 10-K includes several statements indicating that future results are unpredictable or uncertain:

In particular, our TrueTouch™ family of products is highly concentrated in consumer handset markets which are susceptible to changes in the general economy, consumer acceptance, design wins, competition and price.

Because our markets can be volatile, are based on consumer demand and subject to rapid technological and price changes, our forecasts may be inaccurate, causing us to make too many or too few of certain products…Also, our customers frequently place orders requesting product delivery almost immediately after the order is made, which makes forecasting customer demand even more difficult, particularly when supply is abundant.

Worldwide sales through our distributors accounted for approximately 75% of our net sales in fiscal year 2012. We rely on many distributors to assist us in creating customer demand, providing technical support and other value-added services to our customers, filling customer orders and stocking our products. We face ongoing business risks due to our reliance on our channel partners to create and maintain customer relationships where we have a limited or no direct relationship.

Our analyses and forecasts have in the past and, given the complexity and volatility of our business, will likely in the future, prove to be incorrect and could be materially incorrect.

In consideration of flagging results, uncertainty, and all the shares bought back at higher prices, my own perspective tends to align with the caution of recent writings by Heather Ingrassia and Arsene Lupin, in contrast to Ashraf Eassa's enthusiasm. A Pro subscription is required to review the latter party's article, and he could easily be right. One thing is sure: since their collective work, the company has declared its next quarterly payment and is scheduled to go ex-dividend on December 23rd. However, consensus estimated 4Q earnings are for $0.08 per share, and would not be adequate to cover the dividend.

The earnings event could result in particularly pricey options for the months after January. Therefore, it can make sense to write a call(s), perhaps expiring on January 21st, days after the dividend would be paid in cash or reinvested - and tentatively before the company's Report. Further, if the stock trades lower on December 23rd, the option might be bought back and then re-written if the share price climbs higher after any of the holidays. Currently, a January call at a $9 strike price can be sold for around $65, and should decline in value by close to $11, with less than a month remaining during an abbreviated trading schedule, once the equity trades without the right to the dividend. If the stock bolts higher afterward, profits would be capped; if it somehow goes to $0, all an investor would keep is the $65 and $11 payments.

There are different perspectives on Cypress Semiconductor. While there is the possibility of its shares appreciating, some are hesitant. There is no doubt that brusque results have resulted in a high yielding stock. In the near term, it can make sense to enjoy the income, and perhaps enhance it through the sale of a contract(s).

Source: Cypress Semiconductor: Here's A Way To Play It

Additional disclosure: All currently owned CY shares have a January covered call(s) sold against them at a $9 strike price.