Thursday, December 6, 2012

Silicon Motion Sailing To New Highs Driven By Blistering Growth

Silicon Motion Technology Corp. (SIMO � Snapshot Report) has posted huge gains in 2011, up more than 300% after recently crossing the $20 mark.

With estimates on the rise and a bullish growth projection, this Zacks #1 Rank stock is a small capper out of technology with plenty of momentum.

Silicon Motion Technology Corp. is a fabless semiconductor company that designs and develops a portfolio of data processing and storage devices used primarily in consumer electronics. Some of these products include flash drives, handsets, gaming consoles, PC�s and laptops.

The company has a market cap of $546 million and is based out of Jhubie City, Taiwan.

SIMO has seen big gains in 2011 selling components into high-growth markets like mobile storage and communication devices. That lifted the company to strong Q3 results from November 1 that came in well ahead of expectations.

Third-Quarter Results

Revenue for the period was up 25% from last year to $62 million. Earnings also come in strong at 56 cents, 250% ahead of the Zacks Consensus Estimate.

The company�s largest segment, mobile storage (Flash/NAND drives) saw sales increase 15% to $39 million. But its biggest gain came from mobile communication devices (handsets), with sales up 58% from last year to $20 million.

Gross margin was also on the upswing, climbing to 49.4% from 46.9%.

Financial Profile

Silicon�s financial profile also looks solid, with cash and short-term investments up 21% from last year to $70 million against no long-term debt.

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