Anadigics (ANAD) has been on a free fall over the last month, dropping nearly 50% in value. Part of the drop can be attributed to the overall weakness in the small-cap technology sector. However, what appeared to spur the sell-off was an article at the end of March detailing the teardown of the new flagship Samsung Galaxy S5 by a Russian technology site that did not reveal any Anadigics power amplifiers (PA). A Barclays chip analyst reported that although phone content varies by region, this finding could possibly be a negative for Anadigics since it supplied the S4. The revelation by Anadigics a couple weeks later that its dual-band ProVantage PAs won the design not just in Verizon's (VZ) Samsung S5 model but that its ProEficient-Plus PAs will also be in the S5 model offered by China Telecom (CHA) was not enough to reverse the fall and went largely unnoticed by investors. Despite narrowing the loss to an amount not seen since 2010 and staying on schedule to reach profitability later this year, the stock continues to be punished. Anadigics now sits at a price not seen since July 2012 when the stock hit $1.12 before more than doubling in price a few months later. Anadigics is currently trading at a ridiculously low price and should experience a significant price jump in the coming months.
Earnings Improving
Anadigics management has done a good job of optimizing efficiencies and transitioning product production over to its higher margin ILD process. The benefit of its $100 million capital investment in its Fab is finally starting to pay off and will continue to increase. In addition, Anadigics has been focused on winning designs that produce the right product mix to maximize profit and not bother with products that simply increase revenue that isn't profitable. This is illustrated in the
