Ikanos Communications Inc. (IKAN), is a bargain-priced broadband semiconductor company. It is trading at just $1.10 a share and I have been accumulating a sizable long position while taking advantage of the current price drop.
Ikanos' revenue for the second quarter of 2010 was just below our guidance. Overall, Ikanos' revenue continued to be well diversified by region. Our core VDSL business also saw double digit sequential revenue growth from first quarter to second quarter 2010....Ikanos is debt free and has a book value of $1.73. Institutions are holding 30% and insiders hold 44.5%, which indicate the company is very closely-held. Ikanos is trading at a price to sales ratio of only 0.3 and trades with a forward P/E ratio of 7. I expect the stock price will rebound to the $1.40 area in the very near term and $1.62 in the next 3 months. Investors buying now have very limited downside risk with decent upside reward.
Disclosure: Long IKAN