UBS is positive on Sigma Designs (NASDAQ:SIGM) following meeting with management, noting
1) competitive concerns regarding BRCM are overblown and impact is unlikely to be felt till 2009
2) The company is on track with its roadmap and cost reduction plans with multiple products planned for 2008, and
3) With IPTV/Blu-ray still in early phase of adoption, secular drivers are still strong enough to counter cyclical/seasonal factors.
The firm believe the current despite macro-economic backdrop, SIGM should be able to sustain its growth trajectory given consumers propensity to maintain spending on home entertainment. Remains confident of their estimates for SIGM and believes that at FY09 (end 1/09) PE of 14x, SIGM offers a compelling value.
Reiterates Buy and $75 target.
Notablecalls: As one NCN member said this morning: The market is sorely due for a rally. The news from IBM (NYSE:IBM) will likely give us one and SIGM looks like a good way to play it. Period.