Seeking Alpha
Long only, contrarian, special situations, value
Profile| Send Message| ()  

It appears the chatter on Apple's (AAPL) next iPhone is on the increase again and the new device will be out by the end of summer. A nice play here might be to pick up one time and apparently future iPhone supplier Omnivision Technologies (OVTI) that has a dirt cheap valuation and cash rich balance sheet as well.

7 reasons OVTI is a bargain at just over $13 a share:

  • It has a cash rich balance sheet and has over 25% of its market capitalization in net cash.
  • OVTI is selling at just 9.3 times forward earnings, a solid discount to its five year average (16.1).
  • Insiders are holding tight as there have been no insider stock sales since July of last year.
  • The stock is selling at the bottom of its five year valuation range based on P/E, P/B, P/S and P/CF.
  • The stock has five year projected PEG of under 1 (.65), despite growing earnings at a 21% annual clip over the past five years.
  • OmniVision is selling under the median analysts' price target of $21 a share by the 8 analysts that cover the stock. Both Robert W Baird and Northland Securities have slapped "outperform" ratings on the stock over the last few months.
  • OVTI is trading at just above where it bottomed last year (See Chart)


(Click to enlarge)

Source: Time To Get Back Into This Cash Rich Apple Supplier