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Editor's notes: SIGM is trading at 2X cash giving it little downside and its on-going restructuring and activist presence promise significant opportunity going forward. More than 100% upside is possible.

BACKGROUND

Sigma Designs (SIGM) is a provider of system-on-chip (SoC) solutions to four markets: Digital Television (DTV), Set-top Box (STB), Home Networking, and Home Control/Automation. The underlying theme driving these markets is the connected home experience - any room, any screen. The primary end-market being the everyday consumer (with ever-increasing expectations) results in a highly competitive industry distinguished by rapid technology change, evolving standards, and decreasing ASPs. Winning in this area requires scale or differentiation; where main competitor Broadcom (BRCM) dominates at both. These competitive forces and industry dynamics have created havoc on Sigma's operations; coupled with poor execution, are also reasons for the stock's 5-year scrape along the bottom, losing over 75% of value.

In...

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