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Is Pixelworks A Pump?
To anyone interested in Pixelworks (PXLW):
Since my SeekingAlpha piece went public, there's been a lot of up and down action in the stock. For the record, I have no expertise in trading. Accordingly, I have no comment on the trading action. Investors are entitled to buy or short as they will. I'm not going to get involved in day-trader wars. That's their domain and I respect their skill.
I expect no less in return. Ultimately, a stock will go where it deserves to go. Thus, I caution investors against listening to anyone who1) tries to "pump" the stock or 2) calls the stock a pump without providing specifics.
From what I've been able to ascertain, there are no known "pumpers" involved with this stock - just my articles on SeekingAlpha / PoisedToTriple. I know my catch-phrase sounds like something a pumper would use, but that's why I chose the name. It's my way of saying, "There are real companies with a real shot at tripling. But usually, it requires a real analyst to distinguish them from the pumps."
In that regard, I've been involved with stocks since the mid-80s. I've been a technology analyst since the mid-90s. I've been a very public figure throughout -- you can find out a lot about my professional life on my web site and my life as a track athlete, coach, and author via Google.
Now, to be clear, that doesn't mean that I'm perfect. Despite what actual pumpers want you to believe, no analyst is. A fair number of my picks fail (some, in epic fashion). However, and perhaps by sheer luck, a much larger number succeed. My history of wins and losses is easy to find and see.
For the record, I have selected PXLW as a stock that could be poised to triple for several reasons. Investors who have been focusing on the iTV opportunity are missing the point. Getting into iTV is a possibility and would represent a home run of major proportions. However, at this stage, it is just possibility…and therefore not why I selected the company.
The most tangible merits of PXLW revolve around the following:
1. Their IP business seems to have bottomed and is now ramping back up. The market seems to be moving in this direction because it creates cost efficiencies.
2. The projector business is expected to gain substantial market share next year, thanks to a major customer win / project in process.
3. A successful activist shareholder (Becker Drapkin - look them up) has been providing guidance to the company. They have a great track record for unlocking shareholder value. Most recently, they oversaw the sale of Hot Topic (another stock that many thought was a dog, until they were bought for $600 million).
The company, its earnings transcripts, and SEC documents will confirm each of these points (I've provided much of the heavy lifting on the PoisedToTriple website). In other words, nobody is claiming that they've discovered how to mine gold on the moon. This is a real company with a real history…and it's working on a building a strong future.
This is the key difference between a pump and a speculative stock.
Will PXLW succeed? As with all of my picks, only time will tell if this will be a home run or a dog. I can never predict which until after the fact (if I could, I'd never be wrong!). For now, if you ask my opinion, I'll offer my opinion that the stock doesn't adequately reflect the odds of success.
I won't offer more than that, along with updates as event unfold. Why? Because, until the next event unfolds, there's nothing new to be said. I'm not here to support (a.k.a. pump) the stock. I'm here to lay out the merits and let you decide for yourselves.
Thus, I urge anyone interested in PXLW to read my research, do your own homework, and then decide for yourselves. If you do and conclude that the company will fail, I respect that. Divergent views are what make markets. Just be sure that you have a well-researched view of your own to offer…
…and be careful who you listen to. There are many (too many) pumpers in this world. You don't want to listen to them. Nor do you want their existence stop you from discovering the real analysts that exist out there.
Kindest Regards,
Mark G.
p.s. Keep in mind that pumps work both ways (long and short). Personally, I will never accuse anyone of being a pumper or a "reverse pumper", but they're out there. All the more reason to do your homework choose sides carefully.
Disclosure: I am long PXLW.
LG & PXLW
Here are a couple additional PXLW / LG data points:
It is also upping its ante when it comes to picture quality. FYI, LG's 84" 9600 Ultra LED HDTV incorporated two Pixelworks imaging processors to handle the 4K upscaling. Shortly after its release, CNET did review providing super close-up screen shots comparing LG's picture quality to Sony's 84" Bravia LED. You can decide for yourself which was better.
As you do, keep this in mind - the Sony model costs 50% more than LG's. It seems to me that PXLW's latest technology is providing more competitive value than it has in the past.
In addition, it should be noted that the high-end TV market amounted to just 50 million units back then. At present, the smart TV / Ultra TV market is expected to approach 100 million units over the next 12 months.
Disclosure: I am long PXLW.
HIMX Q1 Earnings Call -- Quotes & Notes
It's 1AM, so I'm jumping right into this one...
Revenue rose 5.4% year over year to $175.7 million, beating the consensus of $173.8 million. EPS of $0.09 per share beat the consensus of $0.07. Guidance calls for Q2 revenue to increase 17%-20% Q/Q, and for Q2 EPS of $0.11-$0.12. That beats the consensus 15% growth estimate and EPS estimate of $0.10.
In other words, it was a great quarter. Here are the key quotes and notes (in italics):
In other words, our biggest business shrunk and we're still growing faster than Wall Street expects.
In other words, this is our biggest business now and it's growing nicely.
Well positioned in hot markets. FYI, non-driver products revenues were down sequentially due to weaker CMOS image sensor sales. Higher resolution units are expected to experience "strong growth momentum during Q2 and throughout the rest of the year."
Innolux continues to diversify away from HIMX. This has held growth in check. Innolux could also serve as a headwind for the stock in the coming months, because it filed to sell somewhere around 25 million shares of HIMX that it owns (and now has a nice profit on).
Speaks for itself.
All nice improvements.
Speaks for itself.
Between this and the Innolux comments above, we're a little concerned that the stock may need to take a breather.
Korea...a.k.a. Samsung
a.k.a. cell phone cameras. This time next year, LCOS (displays for Google Glass and Xbox Goggles) could be the biggest non-driver segment.
As a general disclosure, we do not disclose or comment on specific customer information unless it is required by the SEC reporting guidelines or the customers themselves publicly identifies us as a supplier…Our focus remain to continue to work with our customers who try to bring new technology display product to the market as soon as we can. All first development project is under strict disclosure agreements.
As we mentioned in early earnings calls head-mounted display is a new and exciting product area with a great deal of potential in many applications where we believe our technology is superior to other competing technologies.
In other words, there could be some new supply of shares hitting the market soon. Plus the cat is out of the bag regarding Google Glass and other wins, so the stock could take a breather during the summer months.
Also, "we have actually a very good number of customers lined up...we are very careful in choosing our customers…we are not prepared enough (to ramp production versus all the potential demand) so we are in a very strong position… I believe that the technology is superior by far and is for the foreseeable future."
NICE !
Yes, on the high end in particular. Or we call high IC power testers. They are applied only for high-end smartphone and tablet product.
Do you intend on buying more testers as the quarters go on?
Yes.
All random stuff with not too much bearing overall.
Disclosure: I am long HIMX.