Cobiaman
Long/short equity, value

M/A-COM - Premium Semiconductor Player At A Cheap Valuation

M/A-Com Technology Solutions (NASDAQ:MTSI) is a rejuvenated high-end semiconductor company poised for accelerating revenue growth and significant margin expansion. For ten years, M/A-Com was a subsidiary of TYCO Electronics and was run as a cash cow with little investment in R&D. As a consequence, the company's product line got long in the tooth and had declining gross margins and lost significant share to competitors. As an illustration, when the company was purchased in 2009 by technology investor John Ocampo it had 36% gross margins compared to 70% gross margins at Hittite Microwave (NASDAQ:HITT), its closest competitor. Ocampo's first move as owner of the company was to double the R&D staff and charge them with focusing on...

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