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Tessera Appears To Be Breaking Out

It appears that Tessera is trying to break through that tough $20 barrier today ($20.14 as I post this).

The technicals still look good and if it closes above $20...it should be free from the resistance and $20 would provide some level of support.

Tessera has ~$10.50/share in the bank with no debt and their non-GAAP net income from last year was $1.15/share. $20 per share looks pretty cheap right now, especially with the MEMS opportunity and the xFD patents (and Silent Air Cooling?). They appear to have the upper hand in all their current litigation (the ITC Wireless case is final and now it's up to the district court to determine past damages). This could lead to some significant settlements in 2012.

Many people look at Tessera's financials and think they lost $$ last year. In reality, Tessera was forced to take a ~$50 Million charge for Goodwill impairment when their stock dropped last August. That makes them appear as if they were unprofitable last year...but they just kept innovating and socking money in the bank. Their MEMS technology is disruptive, and could quickly capture a significant portion of the cell phone camera market in late 2012. They should be announcing design wins in the first half of 2012 based on comments in the most recent CC.

Check out their most recent corporate presentation here, and pay close attention to the size of the MEMS market.

Here are a few technical analysis links worth reviewing....

http://www.stockta.com/cgi-bin/analysis.pl?symb=TSRA&cobrand=&mode=stock

http://www.barchart.com/opinions/stocks/TSRA

and here's the P&F Chart (double top breakout Jan 18th with a bullish Price objective of $31.5)

http://stockcharts.com/def/servlet/SC.pnf?c=TSRA,P&listNum=

Disclosure: I am long TSRA.