Simtek Corp. On The Rise

If you're up for a modest risk in a very smart young semiconductor company, Simtek Corp. (SMTE) might be a good bet for you, one with some real upside. I see a double your money here!

So far SMTE has yet to turn a profit, but management expects the fourth quarter results to be quite strong, and enough to put the company into profitability for the first time.

I think this is the time to get in with this company. The numbers have been steadily improving, with the third quarter 2006 results at 242% above the third quarter of 2005, and the net losses steadily diminishing. Cypress Semiconductor Corp. (CY), one of the leading semiconductor companies in the industry, has taken a strong position on SMTE, and clearly it believes Simtek's products have real potential. It's products are currently being used in the U.S. Military Apache helicopters, Ricoh copiers and prosthetic limbs, among other items).

I think this company could be growing at a 50% clip over the next few years. The company has applied for a NASDAQ listing, which will give the stock a much higher profile, and can only help the price. If you can take a slight risk, I think this one could make you a lot of money.

Type of stock: A relatively young semiconductor company that is on the verge of breaking out.

Price target: As long as this stock is below $5, I think it's worth picking up and holding for at least a year or two -- this is a double to $10.

SMTE.OB 1-yr chart

Comments

[GreenAB:]

nice growth story, but the stock is not cheap at current levels.

with the nasdaq listing stockholders are cashing in.
CY is offering 1.0 of it´s 3m shares.
and the company registered 1.2m new shares (positive part: 1m warrants are exercisable at 7.50)

"This prospectus is being used to register 2,351,155 shares of Simtek
Corporation's common stock being offered by the selling security holders, which
include certain of our current officers and directors. Of the shares offered by
this prospectus 1,153,171 shares are currently issued and outstanding and
1,197,984 shares are issuable upon exercise of outstanding stock purchase
warrants with exercise prices ranging from $3.30 to $7.50 per share."


at the price of 5.85 the company will have a market cap of 95m post nasdaq listing.
book value is 17m (7m of it is a non competition agreement?) with only 3m cash.

revenue growth is impressive but i would like to see some kind of EPS guidance here,
before i would buy in.

if the business is that great, why did CY reduce their stake instead of aquiring the company?

2007 Jan 10 07:46 AM