TRID - Amazing earnings
TRID performed as expected. Better than expected.
All signs were pointing to success:
* Circuit City and Best Buy announced strong flat panel TV sales
* Samsung had great HDTV and flat panel performance. TRID has 60% of Samsung
* GNSS saw falling sales
The only way strong performance in the market can happen and one supplier suffers is if the other supplier is stealing market share. TRID now has 30% of the LCD TV market.
Here's how TRID did:
* Sales up 177% (from $16M to $45M)
* Sales were up 10% sequentially
* Earnings up 900% (from $0.02 to $.18)
* Beat expectations by $0.02 or 12%
* Raised guidance for next quarter by 10%~12%
Now for the concerns:
* Gross Margins are falling sequentially and Y/Y. I am surprised. I expected increasing margins. It's slight - 0.3% sequential and 1.5% Y/Y. I have heard that silicon prices have increased, but I am concerned.
* Ability to maintain position - competitive threats beyond GNSS are always around. A $200M market is hard to ignore, and BRCM or others could move in. More critically, there is talk that TRID is vulnerable in that one of their chips is not integrated. Specifically, the HiDTV chip is not integrated - integrated chips take up less real estate and that makes them perform better and are cheaper to make. The integrated chip will emerge at the end of the year. If there are competitors with an integrated chip - design wins could be lost.
Life looks great for TRID right now. The P/E just dropped from 600 to 56. If they hit the target next quarter, it will have a P/E of 44. A P/E of 44 is awfully low for a company that is expected to double earnings again for the next year. This is a very reasonably priced company with upside potential.
All signs were pointing to success:
* Circuit City and Best Buy announced strong flat panel TV sales
* Samsung had great HDTV and flat panel performance. TRID has 60% of Samsung
* GNSS saw falling sales
The only way strong performance in the market can happen and one supplier suffers is if the other supplier is stealing market share. TRID now has 30% of the LCD TV market.
Here's how TRID did:
* Sales up 177% (from $16M to $45M)
* Sales were up 10% sequentially
* Earnings up 900% (from $0.02 to $.18)
* Beat expectations by $0.02 or 12%
* Raised guidance for next quarter by 10%~12%
Now for the concerns:
* Gross Margins are falling sequentially and Y/Y. I am surprised. I expected increasing margins. It's slight - 0.3% sequential and 1.5% Y/Y. I have heard that silicon prices have increased, but I am concerned.
* Ability to maintain position - competitive threats beyond GNSS are always around. A $200M market is hard to ignore, and BRCM or others could move in. More critically, there is talk that TRID is vulnerable in that one of their chips is not integrated. Specifically, the HiDTV chip is not integrated - integrated chips take up less real estate and that makes them perform better and are cheaper to make. The integrated chip will emerge at the end of the year. If there are competitors with an integrated chip - design wins could be lost.
Life looks great for TRID right now. The P/E just dropped from 600 to 56. If they hit the target next quarter, it will have a P/E of 44. A P/E of 44 is awfully low for a company that is expected to double earnings again for the next year. This is a very reasonably priced company with upside potential.
posted by Andrew at
9:05 PM
1 Comments:
Andrew - I am not sure why you still like Trident. Have you considered the possibility that perhaps Trident's may not do as well in the future because of teh changing fundamentals. TRID makes chips that are used mostly in LCD/HD TVs, which are expensive. People who have purchased houses recently and sitting on big equity in their houses have bought/will buy these expensive TVs. Now the housing market appears to be slowing down, interest rates going up, stagnating wages, ARMs getting reset etc. They all point to consumers spending less. The first thing that people will do when they want to cut down their expenses is not buy expensive items.
TRID delivered big earnings this quarter and looks like they will do so in the next 1-2 quarters because all the OEMs have already placed orders for the next couple of quarters. But what happens if the slow down is for real.
Great calls on GRP, TIE & AKAM. I don't like STX though as they are cyclical and may have hit their cycle high.
Looks like you are big on mining related stocks.
Post a Comment
Subscribe to Post Comments [Atom]
<< Home