Himax tumbles as Street digests Q1 report

Though Himax (HIMX -12.2%) saw only modest losses yesterday after offering soft Q2 guidance (blamed on a customer inventory correction) to go with a slight Q1 EPS miss, it's having a much rougher time today.

On the Q1 CC (transcript), management was peppered with questions about whether the inventory issues at a major Korean customer (almost certainly Samsung) stemmed from the customer losing share to rivals. Himax also faced questions about a relatively muted gross margin growth outlook, and the pace at which LCOS microdisplay sales (linked to Google Glass' launch) will grow.

Chardan's Jay Srivasta downgraded shares to Sell yesterday: He thinks Samsung is "struggling to compete" against Chinese white-box OEMs (previous), and now believes Google Glass' (GOOG) commercial launch could be a 2015 event. As evidence, he notes Himax doesn't plan to ramp its LCOS production capacity this year - it's currently at just 300K units/month.

Shares now go for less than 10x 2015E EPS.

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Comments (18)
  • jfreeman
    , contributor
    Comments (19) | Send Message
    this is dreadful news. Does *anyone* think this is a buying opportunity? Or should one just sell and take the loss?
    9 May 2014, 03:26 PM Reply Like
  • 1eyedfatman
    , contributor
    Comments (65) | Send Message
    jfreeman, although it is impossible to time bottoms on the market or a particular stock, I could not resist buying back in this morning. I am willing to be patient and hold this position until there is better clarity on both Glass and Samsung. I have the luxury of playing with house money here, having sold my original position in HIMX very close to the top in March. Admittedly, it would take a lot more intestinal fortitude to buy right now if I were still holding my original position. Good luck!
    9 May 2014, 03:35 PM Reply Like
  • Aaron.Rhodes
    , contributor
    Comments (366) | Send Message
    This is bad short-term news. Long-term is still bright, plus the dividend is coming a 2 months. I'd buy.
    Don't get shaken out of your position. HIMX isn't going anywhere.
    9 May 2014, 03:37 PM Reply Like
  • berniespear
    , contributor
    Comments (251) | Send Message
    Everything is going back to where it was a year ago. No biggie.


    Just wait it out if you can, if not then you got some decisions to make.
    9 May 2014, 03:43 PM Reply Like
  • Stock Market Mike
    , contributor
    Comments (3796) | Send Message
    HIMX is "on the map" now, so it's not like it's going to return to $3. There's a lot of buyers that would swoop in long before that.


    Caveat emptor, of course. If we have another 2008, HIMX will be right back to $3 and beyond. Many companies will be! ;)


    9 May 2014, 03:52 PM Reply Like
  • CT Programmer
    , contributor
    Comments (1069) | Send Message
    There is a lot of focus on Glass, and that is what propelled it to $15 too quickly. Everyone jumped on the bandwagon, and now it has whipped back the other way (way too much if you ask me). I was in from the $2 level, and it even sank to $1 (I bought more) until bouncing back and starting its climb. News of Glass showed up around the 3's if my memory serves me, and it took off from there. But HIMX had already turned the corner and now has components in lots of tech and great R&D. They are backed by solid earnings growth, not just Glass hype. The "miss" of 10.8% revenue growth YoY doesn't have much Glass baked in there. That was all large-panel and small/mid-panels. "Other" was 20% of revenues. Even the large-panel segment, which most people thought would decline for years, is now projected to increase with 4K TV. But I do think $15 is about the appropriate price within the next two years. If Glass takes off --- all the better. Will it drop more in the near future? Can't say as my crystal ball is in the shop. But the only reason I'm not buying more currently is it has grown to be a hugely outsized portion of my portfolio.
    9 May 2014, 03:59 PM Reply Like
  • CT Programmer
    , contributor
    Comments (1069) | Send Message
    I'd take note of that last one more than anything:


    "Shares now go for less than 10x 2015E EPS"
    9 May 2014, 04:00 PM Reply Like
  • kkpar4
    , contributor
    Comments (2) | Send Message
    Sell now
    9 May 2014, 04:03 PM Reply Like
  • hector apart
    , contributor
    Comments (32) | Send Message
    Best stock to buy now= CALL(MagicJack)
    Earnings announcement on Monday.
    Will be impressive
    9 May 2014, 04:37 PM Reply Like
  • haschultz
    , contributor
    Comments (1188) | Send Message
    I sold some Jan 2016 $12 Puts today for $5.60 which means I get to buy HIMX for $6.40 if the shares are put to me or get $5.60/share for doing nothing.


    What a great way to play this gift opportunity!!!!!!!
    9 May 2014, 04:38 PM Reply Like
  • charliemey
    , contributor
    Comments (105) | Send Message
    I sold $14 puts also but now they dont look good!
    9 May 2014, 04:55 PM Reply Like
  • 808Amigo
    , contributor
    Comments (505) | Send Message
    Thank you haschultz and charliemey for clueing us to look for the opportunities you found today. Unless we're in another 7 year financial collapse Jan 2016, I think you made out like bandits today!!!
    9 May 2014, 06:54 PM Reply Like
  • Bullmarketcall
    , contributor
    Comments (2119) | Send Message
    if an investor claims to be an investor, he shoul be buying HIMX at this prices. however, nothwithstanding the risk, primaraily due to market swings & volatility into which HIMX has an important record. Investos should maintain positions inspite volatility and swings. Even more, as HIMX has shown potential to reach 15 (which goes to 80% upside) it could easily be racing again. On the bright side, some thesis remains unfolded> Pure mobile growth on non driver solutions. Google Glass potential. Serious dividend. !0% Y/Y growth. Loss of customer such as Samsung still to be taken as hipothetical.
    Could HIMX make new customers? Is Google delaying only few months glass for markets? Is that of such releveance?
    Even more, metrics still support theroy, as trading as low as 10x P/E.
    9 May 2014, 06:12 PM Reply Like
  • 808Amigo
    , contributor
    Comments (505) | Send Message
    The 24% drop this week piled onto what we've already been through has me in heartbreak over HIMX, and yet, I feel really bad for the those who sold 15 million shares at those prices today.
    9 May 2014, 06:58 PM Reply Like
  • BBwetrust
    , contributor
    Comments (2908) | Send Message
    This stock is such a trap. Ever since Merrill Lynch put out a sell on March 24/25, when the stock gapped lower on Mar 25 from 13 something to 11 something. Trading rule No. 1, always respect the big gap. Now it is 6 something less than two months later.
    9 May 2014, 10:23 PM Reply Like
  • Stock Market Mike
    , contributor
    Comments (3796) | Send Message
    TSLA had a big gap down the other day - what do you think of it?


    10 May 2014, 08:04 PM Reply Like
  • cytrax
    , contributor
    Comments (249) | Send Message
    So it took these guys over twenty four hours to digest the results? How do they then account for the stock being ran down -10%, then to +5%, only to close it at -2% on day of earnings. Then tanked it by 12% the following day. They created the perfect bull trap and many people would have fall for it. Insane manipulation!!
    12 May 2014, 07:35 AM Reply Like
  • Hendershott
    , contributor
    Comments (1891) | Send Message
    Samsung's Galaxy S-5 is their best product launch ever! Was that the inventory adjustment?
    22 May 2014, 02:27 PM Reply Like
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