3SOF

Hey!

Check out the chart of SIGM and the recent action.  Do you think this stock would be a good buy on Monday?  I'm thinking about getting some of it.

Thanks,
Leaira

Caught my interest last thursday... Recommended it to my members. It looks awesome! Just be careful with the CC on tuesday!  >:D

(Applause)

Quote from: Leaira on November 19, 2005, 09:41:03 PM
Hey!

Check out the chart of SIGM and the recent action.  Do you think this stock would be a good buy on Monday?  I'm thinking about getting some of it.

Thanks,
Leaira

Good Job Leira!! (applaud you for that pick) ;)
i'll put some chart later... dinner time ;)

Here you go: ;)

I might take a position in SIGM on monday morning... i'll just leave some chart for the 3SOF community... goodluck Leaira & to all ;)

I bought it at $6.05 last August. I believe it is going to $15 by February

The chart below is an "equivolume" candle stick chart. Basically it increases the size of a given candlestick based on total volume for that day.

Using this feature it is clear to see SIGM looks awesome. I notice both a cup & handle pattern as well as an ascending triangle breakout. I think you are being a little conservative with your price target. I think SIGM could move higher than 15.00 even. Based on the concept of a measured move I see the short term target being 16.00-17.00... this is all based on a positive CC on tuesday obviously.

I applaud both of you. Great find!  ;D

All you need to know technically!!

SIGM, the #23 largest % gainer on Nasdaq last week(+21%) on HEAVY volume,breaking out to a nearly 6 YEAR HIGH!! ,across KEY mutli year resistance.Targets 14.50-15,very short term,then 17-19 ,22-24, 29-30 & 38-40 (longer term)(or higher!!)100% technical projections based on chart patterns,long term uptrend analysis & angles of ascent.

LONG & STRONG!!   Go SIGGY!!

This one showed up in one of my scans on Friday, with it's classic cup 'n handle (excellent chart, calven, I'd applaud if I could).

I looked a little deeper, dig this 3 year weekly baby:

(http://img474.imageshack.us/img474/5520/051120sigm1xa.jpg)

Oh snap! A point which has been the universal "sell" signal for over a year just got busted like a windshield in the Bronx on free commemorative bat night at Yankee Stadium.

I agree with your technical target, and with the NASDAQ winds blowing at our backs, this thing could double. Definitely an attractive pick!

I would be shocked if this pick didnt catch fire.  >:D   Of course we always have to worry about the CC tuesday at market close but Im not too worried....

applauding everyone ahead of time. Great setup. and great chart work all...

Quote from: calven on November 20, 2005, 11:20:41 PM
 Of course we always have to worry about the CC tuesday at market close but Im not too worried....

...yes the CC, and sometimes setups are just a little too good. Hard to quantify what I mean by that, so I'll just leave that caveat on the table as-is...

This thing could turn out like TMTA... the chart looks amazing and then guidance bursts the bubble to send it down 25%.  If it doesn't double on Tuesday or Wednesday I might get in  ;D.  Applaud all y'all for your work... the TA is really good on this baby.  We've got a runner if expectations for the quarter aren't extremely high already.

News, News  ;)

Sigma Designs profit more than triples to $1.9M
http://biz.yahoo.com/bizj/051122/1194638.html?.v=1

Sigma Designs 3Q Profit Up Fourfold
http://biz.yahoo.com/ap/051122/earns_sigma_designs.html?.v=1

Quote from: Terlisa on November 23, 2005, 02:45:19 AM
News, News  ;)

Sigma Designs profit more than triples to $1.9M
http://biz.yahoo.com/bizj/051122/1194638.html?.v=1

Sigma Designs 3Q Profit Up Fourfold
http://biz.yahoo.com/ap/051122/earns_sigma_designs.html?.v=1

I stayed out pending the news...I've got a few hours to figure out what to do here I guess :)

Quote

I stayed out pending the news...I've got a few hours to figure out what to do here I guess :)

Quote

I'm already in RED  :-\.. i took a position @ 12.95 yesterday ... should be a great day tomorrow ;)

Quote from: Terlisa on November 23, 2005, 02:55:29 AM

Quote

I stayed out pending the news...I've got a few hours to figure out what to do here I guess :)

Quote

I'm already in RED  :-\.. i took a position @ 12.95 yesterday ... should be a great day tomorrow ;)

Thats not too bad, saw an after hours trade @ 12.95...you'll probably be ahead of me at the bell :)

These are the new or significant statements made by SIGM on this week's conference call:

Many of SIGM's accounts are showing steady demand for its chipsets. Design activity remains exceptionally strong as the SMP8634 continues to attract more top tier accounts across multiple market segments. The firm's heaviest focus remains on IP set-top box (STB) opportunities, where it enjoys a leadership position in both technology and market position. SIGM is also increasing its engagement for high-definition DVD players along with other new consumer products, which combined have the potential to generate substantially increased revenues throughout the coming year.

The firm has now entered into a timeframe in which it feels its visibility enables it to offer reasonable guidance for future revenue growth. Therefore, based on current visibility, SIGM expects to achieve approximately 20% revenue growth in its fourth quarter. Though SIGM anticipates continued sequential growth throughout next year, it will not be supplying specific guidance at this time.

Relative to previous (2006) unit market estimates from SIGM, the firm sees upside in every category. Based on SIGM seeing many large organizations, large telcos with very, very determined plans in place to meet a schedule of deployment, the highest probability of upside looks to be in the IPTV space. SIGM has assurance from TSMC (its chip foundry) that it would have capacity to take care of its needs even in the optimistic scenario.

There are a lot of new features SIGM is adding to future versions of its chips that will guarantee that they will be designed into the next series of products.

SIGM has qualified its new SMP8634 silicon and will be providing production parts in mid-December, as well as production software for all primary features. SIGM's market intelligence indicates this is substantially ahead of its closest competitor. The firm will have the capacity to ship probably more than the demand in December. Collectively, as SIGM hits December, January, February, it will be shipping in the tens of thousands.

SIGM has become the first silicon of choice for a total of five major STB suppliers who are developing Microsoft TV-based STBs. As speculated, SIGM is the silicon behind the Motorola STBs being readied for deployment by SBC. Again as speculated, SIGM is also the chosen silicon behind the Philips STBs being readied for deployment by British Telecom. Regarding the three unannounced MSTV STBs, SIGM is making every effort to announce these formally and is applying as much pressure as is reasonable for it to apply. SIGM is demonstrating a STB product with Scientific Atlanta, but can't preannounce their intentions (although that firm stated at a recent investor conference that SIGM was one of their two IPTV platforms, the other being ST Micro, and that they planned to develop both platforms as well as several different versions of software to run on them).

SIGM is engaged with a number of independent telco STB deployments that leverage its foundation of strength and IPTV expertise to launch non-MSTV services next year. This includes SIGM's continuing shipments to UTStarcom, who is a strong force in the developing market for IPTV in China, which currently includes China Netcom and China Telecom. SIGM is in very strong position in China, not just with UTStarcom, but with other accounts as well. SIGM is also involved in other UTStarcom projects, on a selected basis, although China is the top focus. This also includes a fast-moving telco in Europe who is expected to launch new services during the first half of next year. And finally, this includes a studio-driven movie download service that's also expected to launch new services in the first half of next year. SIGM believes that, as a group, these IPTV deployments have the potential to start adding to its top line in the fourth quarter of this year with far more substantial growth next year.

Microsoft has an enormous effort to support the worldwide IPTV engagements they have. They have a large design team that's not only porting to different set-top boxes but are also engaged in developing new feature sets for new future versions of MSTV code that will bring out some of the types of features that have not been implemented by telcos or anybody else yet. The telcos are focused on providing differentiated services, not just "me-too" video, so they are going to continue to roll out new features. Without tipping their hands for them, this is a pretty wide-reaching effort and Microsoft is very heavily involved in this. Obviously, as they move to develop these new features, they are asking SIGM for new silicon support and the firm is working in a close partnership with them to keep that in a very tight loop.

DMAs appear to be heading toward a volume ramp as SIGM heads into next year. Wide-reaching programs involving Intel's Viiv and Microsoft "Play for Sure" technologies will result in greater proliferation of media center PCs next year, which are expected to drive the unit demand for DMAs to extend the entertainment network throughout the home. Sigma has achieved design wins at the majority of current DMA suppliers and has engaged with a new slate of vendors. Several new product launches are set to occur at CES with ensuing revenues having an incremental impact on the firm's top line starting in the first quarter of next year. To date, SIGM does not know a substantial vendor of DMA products that is not using SIGM media processors in their design. Intel is trying to act as a catalyst for the entire DMA industry and is going to be contributing to the overall marketing programs, including some money that they will allow people to use for advertising and promotion.

Previously, SIGM indicated its involvement with four vendors of Blu-Ray or HD DVD products. At this time, SIGM is moving ahead on a rapid course of product development to satisfy demand for these first generation players. Additionally, the company has engaged with two other vendors, who are again seeking SIGM to satisfy the demand for a unique combination of features. All of these players will initially be based on the firm's industry-leading SMP8630 series.

Regarding PMDs, several design wins in China have produced a unique segment of demand that has now begun to ramp into volume and which will add to the growth expected in SIGM's fourth quarter.

For HDTVs, SIGM continues to maintain a long-term focus on eventually gaining more flat-panel design wins and expects to be part of more demonstrations at the upcoming CES show. SIGM has a couple of name brands already using its chips, but it has three or four designs with some big names in Asia and hopes a few of them will start showing products at this coming CES.


Technically looking for 16-17 short term,22 intermediate & 30-35 longer term

GO SIGGY!!!!

SIGM now 14.30... already up a buck per share  >:D

UP, UP & AWAY.......................................VERY BULLISH!!!! ;) :D ;D

Up over 20% on this one    >:D

Any of you guys still holding?

Im out 21% gains....


>:D

Earnings on 3/21 and its having a nice today today !~ ;D

Hi, bearish signal...

additional information:
1)
Sigma Designs "strong buy," target price raised
Wednesday, August 30, 2006 1:42:35 PM ET
BWS Financial
NEW YORK, August 30 (newratings.com) - Analysts at BWS Financial reiterate their "strong buy" rating on Sigma Designs (SIGM.NAS). The target price has been raised from $20 to $24.
2)
Sigma Designs "buy," target price raised
Wednesday, August 30, 2006 1:28:26 PM ET
Roth Capital
NEW YORK, August 30 (newratings.com) - Analysts at Roth Capital reiterate their "buy" rating on Sigma Designs (SIGM.NAS). The target price has been raised from $20 to $24.
3)
Investor presentation:
http://www.sigmadesigns.com/public/Investors/pdf_files/investor_presentation.pdf

another coverage:
Sigma Designs initiated with "buy"

Friday, October 06, 2006 12:28:34 PM ET
CE Unterberg Towbin
NEW YORK, October 6 (newratings.com) - Analysts at CE Unterberg Towbin initiate coverage of Sigma Designs Inc (SIGM.NAS) with a "buy" rating.

please read the attached file

on fire .....  >:D

reason for BO ?
Sigma Designs "outperform"

Wednesday, October 11, 2006 6:31:45 AM ET
Robert W. Baird
NEW YORK, October 11 (newratings.com) - Analysts at Robert W Baird reiterate their "outperform" rating on Sigma Designs Inc (SIGM.NAS).


In a research note published this morning, the analysts mention that the ongoing ramp-up of the advanced STBs at major companies, including the first US-based deployment at AT&T, provides significant upside to Sigma Designs' revenues in the current and the next quarter. Robert W Baird expects the company to build up a leading position in the IPTV market during the forthcoming year, in view of the sampling of its Ultrawideband chipset technology.

It's "Pay Off" time for sigma!!!

Sigma Designs Up; Boost Seen From New TV Set-Top Boxes
Dow Jones Newswires - October 11, 2006 2:51 PM ET

By Jonathan Vuocolo
of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Shares of Sigma Designs Inc. (SIGM) shot up 15% Wednesday, a day after Microsoft Corp. (MSFT) and major television set-top-box makers said advanced system-on-a-chip set-tops were available to support Microsoft's Internet Protocol television software.

All advanced Internet Protocol set-top boxes supporting Microsoft's IPTV Edition software platform are based on Sigma's System-on-Chip technology, said Tristan Gerra of Robert W. Baird, adding it's "payoff time" for Sigma, a Milpitas, Calif., digital-video-encoding and decoding company.

Set-tops supporting IPTV made by Cisco Systems Inc. (CSCO), Motorola Inc. (MOT), LG Philips LCD Co. (LPL) and Tatung Co. (2371.TW), enable service providers to deliver high-definition television, digital video recording and picture-in-picture viewing.
Gerra reiterated his outperform rating and $21 price target and said the set-tops "should provide significant momentum to Sigma's top line this quarter and next."
He said in a note that he is also bullish on Sigma's all-CMOS-based Ultrawideband chipset, which allows wireless streaming of high-definition television content from any host system including personal computers, set-tops or DVD players, to one or several television sets at the same time. CMOS is a class of integrated circuit.
Gerra also said the stock has compellingly low valuation.
Sigma shares were recently up $2.23, or 15%, at $17.06, with 3.5 million shares traded - nearly six times average daily volume.
Baird and its affiliates expect to receive or intend to receive investment-banking related compensation from Sigma within the next three months, and the firm prohibits analysts from holding shares in companies they cover.

rock´n roll again

Sigma Designs initiated with "buy"
Thursday, October 12, 2006 10:04:44 AM ET
American Technology Research
NEW YORK, October 12 (newratings.com) - Analysts at American Technology Research initiate coverage of Sigma Designs Inc (SIGM.NAS) with a "buy" rating.
[/b]
link:
http://www.newratings.com/analyst_news/article_1388977.html

&

Second Look: Sigma Designs Inc.
Thursday October 12, 1:24 pm ET
Sigma Designs Shares Surge for 2nd Day on Bullish Analyst Comments, Stock Sets New 52-Week High

NEW YORK (AP) -- Sigma Designs Inc., a supplier of set-top box and digital television processors, shot up for the second consecutive day on Thursday, thanks to bullish comments from a Wall Street analyst.
American Technology Research analyst Jeff Schreiner initiated coverage of the stock with a "Buy" rating on Thursday, and said investors may have underestimated the company's technological advantage over competitors.
"We believe that currently Sigma has a six to nine month technical lead over competitors and that competitive offerings won't become a concern until the calendar-year 2008 timeframe," Schreiner wrote in a note to clients.
Sigma got a boost Wednesday after a Baird analyst said the company could ramp revenue this quarter and next, thanks to the rollout of new set-top boxes.
Shares of Sigma Designs, which have traded between $7.99 and $17.76 over the last year, were up $1.09, or 6.2 percent, at $18.60 in afternoon trading on the Nasdaq. The stock is up roughly 25 percent since Wednesday's open, and earlier in the session the stock hit a new year high of $18.76.

1)
Sigma Designs "buy," target price raised
Wednesday, November 01, 2006 10:20:36 AM ET
Roth Capital
NEW YORK, November 1 (newratings.com) - Analysts at Roth Capital reiterate their "buy" rating on Sigma Designs Inc (SIGM.NAS). The target price has been raised from $24 to $27.
2)
Marketwatch today:
....
Sigma Designs Inc for example, a stock we've mentioned several times in this column in the last few years, made new 18-year highs just recently, running from around 8 in mid-July to a recent high of over 21. October's high-volume breakout came at around the 16 area, and anywhere between there and minor support at around 17 to17.5 would potentially be a good place to accumulate if the sell-off comes on low volume. Our trading targets would be 25 and, if that's taken out, 30 over the next two to three months

wow!
1)
Sigma Designs "buy," target price raised
Wednesday, November 29, 2006 12:35:19 PM ET
CE Unterberg Towbin
NEW YORK, November 29 (newratings.com) - Analysts at CE Unterberg Towbin reiterate their "buy" rating on Sigma Designs (SIGM.NAS). The target price has been raised from $21 to $32.
2)
Sigma Designs "buy," target price raised
Wednesday, November 29, 2006 12:34:34 PM ET
BWS Financial
NEW YORK, November 29 (newratings.com) - Analysts at BWS Financial reiterate their "buy" rating on Sigma Designs (SIGM.NAS). The target price has been raised from $24 to $30.
3)
Sigma Designs "buy," target price raised
Wednesday, November 29, 2006 12:33:20 PM ET
American Technology Research
NEW YORK, November 29 (newratings.com) - Analysts at American Technology Research reiterate their "buy" rating on Sigma Designs (SIGM.NAS). The target price has been raised from $27 to $31.
4)
Sigma Designs "buy," target price raised
Wednesday, November 29, 2006 12:32:34 PM ET
Roth Capital
NEW YORK, November 29 (newratings.com) - Analysts at Roth Capital reiterate their "buy" rating on Sigma Designs (SIGM.NAS). The target price has been raised from $27 to $29.
5)
Sigma Designs "buy," target price raised
Wednesday, November 29, 2006 3:16:53 AM ET
Montgomery & Co
NEW YORK, November 29 (newratings.com) - Analysts at Montogomery & Co maintain their "buy" rating on Sigma Designs Inc (SIGM.NAS). The 12-18-month target price has been raised from $24 to $30.
In a research note published this morning, the analysts mention that the company has reported robust 3Q results, ahead of the consensus. Sigma Designs has indicated that the improvement in gross margins remains on track on account of a better product mix and cost controls. The company has guided to 10% growth in the January quarter.
6)
Unbelievable chart:

fyi:
Sigma Designs "strong buy," target price raised

Monday, December 11, 2006 9:53:57 AM ET
BWS Financial

NEW YORK, December 11 (newratings.com) - Analysts at BWS Financial reiterate their "strong buy" rating on Sigma Designs Inc (SIGM.NAS).
The target price has been raised from $30 to $40.

Quote from: la-onda on December 11, 2006, 11:02:48 AM
fyi:
Sigma Designs "strong buy," target price raised

Monday, December 11, 2006 9:53:57 AM ET
BWS Financial

NEW YORK, December 11 (newratings.com) - Analysts at BWS Financial reiterate their "strong buy" rating on Sigma Designs Inc (SIGM.NAS).
The target price has been raised from $30 to $40.

target exceeded.

1)
Sigma Designs "buy," target price raised
Thursday, August 30, 2007 9:42:44 AM ET
Roth Capital
NEW YORK, August 30 (newratings.com) - Analysts at Roth Capital reiterate their "buy" rating on Sigma Designs Inc (SIGM.NAS). The target price has been raised from $42 to $50.

2)
Sigma Designs "strong buy," target price raised
Thursday, August 30, 2007 1:15:40 PM ET
BWS Financial
NEW YORK, August 30 (newratings.com) - Analysts at BWS Financial reiterate their "strong buy" rating on Sigma Designs Inc (SIGM.NAS). The target price has been raised from $40 to $70.

3)
Sigma Designs "buy," target price raised
Thursday, August 30, 2007 2:45:59 AM ET
Montgomery & Co
NEW YORK, August 30 (newratings.com) - Analyst Erik Rasmussen of Montgomery & Co reiterates his "buy" rating on Sigma Designs Inc (SIGM.NAS). The target price has been raised from $39 to $49.
In a research note published this morning, the analyst mentions that the company has posted robust 2Q results ahead of the estimates and the guidance. Sigma Designs' 2Q top-line growth was driven by IPTV momentum and the overall results were boosted by a solid performance in the high-definition DVD (Blu-ray) markets and robustness in the company's HDTV segment, the analyst says. The company has guided to sequential revenue growth of more than 20%.

4)
Sigma Designs upgraded to "neutral" - update
Tuesday, August 28, 2007 1:17:51 PM ET
American Technology Research
NEW YORK, August 28 (newratings.com) - Analyst Jeff Schreiner of American Technology Research upgrades Sigma Designs Inc (SIGM.NAS) from "sell" to "neutral," while raising his estimates for the company.
In a research note published this morning, the analyst mentions that the IPTV and Blu-ray markets are likely to be robust in the near term. Sigma Designs' performance in the July quarter is likely to have been substantially better than expected and the company is expected to raise its guidance for the October quarter, the analyst says. The EPS estimates for FY08 and FY09 have been raised from $1.11 to $1.43 and from $0.96 to $1.00, respectively.

awesome chart (of course nor holding  ::)

The following analysis was written on October 21st, 2007:

Quote from: poli on September 20, 2007, 04:30:33 PM
David: 

When you get a chance could you take a look at SIMG and see what you think?  I bought some in the mid 5's.

Thanks, Poli

1. Profile

Silicon Image, Inc. (SIMG) engages in the design, development, and implementation of semiconductors for the secure storage, distribution, and presentation of digital content. The company's solutions facilitate movement of digital content between and among digital devices across the consumer electronics, personal computers (PC), and storage markets. Its products are used in various devices, including digital television, digital versatile disc (DVD) players, high definition and Blu-ray DVD recorders, set-top boxes, audio/video receivers, game consoles, high definition camcorders, and digital still cameras. The company offers various consumer electronics products, including high-definition multimedia interface transmitters and receivers, as well as products that connect PCs to digital displays. It also offers storage controllers, bridges, and processors. The company markets its products to the consumer electronics, personal computer, display, and storage markets. It also provides semiconductor intellectual property solutions for digital multimedia and data storage applications. The company sells its products to distributors and original equipment manufactures worldwide directly through direct sales force; and indirectly through a network of distributors and manufacturer's representatives. Silicon Image has strategic relationships with Hollywood studios, such as Universal, Warner Brothers, Disney, and Fox; and consumer electronics companies, such as Sony, Hitachi, Toshiba, Matsushita, Phillips, and Thomson. The company was founded in 1995 and is headquartered in Sunnyvale, California.

2. SIMG's history

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41189;image)

We can identify 4 phases in terms of stock price for SIMG:

Red - It was the technology bubble run, with SIMG rising from its debut price of $11.5, in October, 6, 1999, to a high of $66 in February 16, 2000, a 474% advance in five months.

Back in 1999 the company had $21 M in revenue and $7 M in losses. The share count was 51.5 million (http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=simg&lstStatement=10YearSummary&stmtView=Ann), so at its high the market cap was 51.5*$66 = $3.4 B, incredible.

Blue - The inevitable collapse came, and SIMG fell 98.4% to an all time low of $1.03, set in October 23, 2001. Fundamentally things got really bad, with 2001 revenue at $51 M and losses at $76 M. However, the bad fundamentals seemed priced in, as the market cap at the low point was 63.5*$1.03 = $65 M.

Green - Then a recovery phase, with SIMG rising almost 18 fold between late 2001 and late 2004. Revenue rose from $51 M to $173 M in 2004. There weren't any more losses, as the company posted break even results. The market cap at the 2004 high was 78.1*$18.37 = $1.4 B. The Price to Sales Ratio was quite high, at 8.1.

Yellow - Somewhat strangely, the stock started trending down again. I say that's strange because fundamentals kept improving. Probably it was just that the stock got too expensive and couldn't keep up with expectations.

In October 16, 2006, SIMG still closed at $14.52, so let's take a closer look at what happened since then.

3. SIMG's short term chart

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41190;image)

I want to know what was the cause for the wild price swings and huge volume in points 1, 2 and 3:

1 - On October 27, 2006, SIMG fell 17%, with 6.5 million shares changing hands. The news out that day was:

• Silicon Image Warns (http://us.rd.yahoo.com/finance/external/tsmfe/SIG=126jfi8hs/*http://www.thestreet.com/_yahoo/newsanalysis/techsemis/10317992.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA)
at TheStreet.com (Thu, Oct 26)

Because the company blamed seasonality for the revenue weakness, the stock came back up to close the gap over the next few weeks. However ...

2 - The actual results for the 4th quarter 2006 came in weaker than expected and 2007 guidance was cut. The stock dived 24% to $9.24.

3 - On August 3, 2007, SIMG fell 25.3% with 9.2 million shares volume, due to the following news release:

• Silicon Image Reports Second Quarter Results (http://biz.yahoo.com/prnews/070802/aqth138.html?.v=10)
PR Newswire (Thu, Aug 2)

Guidance was the main problem:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41191;image)

Anyway, with analysts expecting $311 M revenue in 2007 and $338 M in 2008:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41192;image)

... this gives me a Price to Sales Ratio of 1.7, which is well below the 8 the company achieved at its 2004 high, and much more closer to the sales multiple it had at its low point ($1.03 in late 2001, when the sales multiple was 1.27).

4. Valuation Model

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41193;image)

According to my fundamental estimates, I would expect SIMG to recover back up to $11.34 in late 2010, rising 22% a year, on average. Given this, the optimal selling price today (the price where the expected return would fall below 16% a year), calculated by the model, is $7.25, that is, 16% above where it is now.

5. Conclusion

I believe SIMG is moderately attractive at this point, good luck poli :)

The following analysis was written on October 31st:

Quote from: realcoolhead on September 21, 2007, 11:37:16 PM
SIGM, this stock seems holding up very well during the latest pullback.

David, care to comment on this? I got SIGM from this guy, and his talking fits your thesis pretty well ...

http://www.changewave.com/freecontent/2007/09/freetobymain20070919.html

Yes, I fully agree with the macro views inside this article. And SIGM has been doing reasonably well :)

1. Profile

Sigma Designs, Inc. (SIGM) offers silicon-based digital media processors primarily for Internet protocol (IP) video technology, connected media players, high-definition televisions, and personal computers add-in and other markets. Its REALmagic video streaming technology is used in various consumer applications providing integrated solutions for decoding of H.264, MPEG-4, MPEG-2, MPEG-1, and Windows Media Video 9. The company offers silicon-based media processors for Internet protocol television set-top boxes, digital media receivers, high definition DVD players, high definition television, and portable media players. It also provides video and audio decoding chips under the names of EM8400 series, EM8500 series, EM8610 series, EM8620L series, and SMP8630 series for the IP video technology market and connected media player market, as well as the PC add-in market. In addition, the company offers development kits, engineering support services, and chipset customization engineering development. Sigma Designs sells its products to consumer equipment manufacturers, distributors, value-added resellers, and corporate customers through direct sales force and distributors. The company was founded in 1982 and is headquartered in Milpitas, California.

2. SIGM's History

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41489;image)

SIGM traded within a range for twenty years, between roughly $5 and $20. It broke out of this 20 year old range in late 2006, and more upside followed.

I notice that the share count doubled between 1998 and 2007 and the current market cap is 24,398,318*$58.59 = $1.43 B.

I think the crucial question in SIGM's historical analysis is: "What was the catalyst for the late 2006 breakout?"

As usual, the answer is given by a change in the fundamentals. Revenues were more or less flat for 10 years, but in 2006 quarterly revenues and profits began to improve dramatically:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41490;image)

3. Recent Developments

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41491;image)

I've selected points 1 and 2 to get a feel of which are the news driving the stock higher:

1 - In August 30, 2006, SIGM rose 17% to $13.73, on volume of 4.3 million shares. The news out that day was:

SIGMA DESIGNS, INC. REPORTS SECOND QUARTER RESULTS (http://www.sec.gov/Archives/edgar/data/790715/000126645406000395/sigma_8k-ex9901.htm)

«Net revenues for the second quarter were $20.1 million, up 36% from $14.8 million for the previous quarter and up 153% from $8.0 million reported for the same period last year. The increase in revenue and selected financial results was primarily attributable to increased chipset sales to manufacturers of IPTV set-top boxes.»

«"We are pleased to report another 36% sequential increase in revenue resulting in a year-over-year revenue growth of 153%. This further demonstrates the inflection point in demand for IPTV based deployments at a widening set of telco carriers as well as Sigma's dominance in this market. We are now shipping media processor chips for volume consumption in every major region of the world and believe that our SMP8634 chipset is becoming a defacto standard for IPTV set-top boxes.»

2 - Exactly one year later, in August 30, 2007, SIGM rose 10.5% on 10.5 million shares changing hands, due to the following news:

• Sigma Designs, Inc. Reports Second Quarter Results (http://biz.yahoo.com/bw/070829/20070829005999.html?.v=1)
Business Wire (Wed, Aug 29)

«The increase in net revenues was primarily attributable to increased SoC sales to manufacturers of IPTV set-top boxes, Blu-ray Players, and HDTVs. Net revenues for the first two quarters of fiscal year 2008 were $78.6 million, up 125% from $34.9 million for the same period in the prior fiscal year.»

So, after 20 years asleep, SIGM landed a very fast growing market, chips for IPTV set top boxes. It appears telcos want to replace cable companies in our homes, through IPTV. I saw some commercials here in Portugal, with Sonaecom (a mobile phone operator), offering TV in a similar way cable does, and thought it was strange, but now I see it had to do with IPTV already being in the marketplace.

4. Valuation

There's no doubt SIGM is in a very hot sector and it has been growing revenues and profits in a spectacular way. The stock reflected this growth by rising 500% over the last 12 months. The question now is: "Is there more to come or SIGM is fully valued now?"

To try answering this question first let me consider analysts estimates:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41492;image)

They're expecting $1.94 EPS in the fiscal year ending in January 31st, 2008. So the Price/Earnings Ratio is 30. I think the fiscal 2009 estimates are way too conservative, since they're expecting just 7.7% growth, which is ridiculous in my opinion. I think this sort of thing happens because analysts are fast in upgrading the current year estimates (due to positive earnings surprises), but they "forget" to raise next year's estimates as quickly:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41494;image)

As usual I'm going to use my valuation model and my best guesses to determine if SIGM is attractive and if so, by how much:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41495;image)

Considering 5% share count CAGR, 50% revenue CAGR, 25% net profit margin and 25 times earnings multiple, SIGM's shares will rise roughly 33% a year, to $137.65 three years from now.

And I'm being fairly aggressive in my estimates, because, let's see, I have 5% dilution factor, while the historical share count growth rate is 8.2%. I have 50% revenue CAGR, but analysts are expecting just 34% growth in fiscal 2009. I estimate net profit margin will remain at 25%, but in the latest earnings release management said the following:

«The Company expects a continued increase in demand for its products with over 20% growth in net revenues for the third quarter. The Company's gross margin target remains within 200 basis points of 50% with some variance expected due to the timing of its cost reduction efforts and pressure from its customers to lower its selling prices as their order levels grow.»

And an earnings multiple of 25 is above the general market average which is about 15.

5. Conclusion

33% a year is attractive, but considering my goals for the Main Portfolio, which are "at least 30% average annual growth", it just barely beats the objective. I need to own stocks which I expect to rise a lot more than 30% a year to compensate for the ones that will rise less, or not even rise at all.

The ideal time to buy SIGM was in August 2006 when the stock jumped above $13 on better than expected earnings, since back then it was already clear that was due to an emerging trend, IP TV.

Now, even though the stock is still quite attractive, it seems a bit late for my goals. I don't think making chips for IP TV set top boxes can ever be a $5 B business, $2 B - $3 B is the top in my opinion. And of course, there are risks (there are always risks), IP TV can be a flop, with not a lot of market acceptance, or there can be competition for SIGM's chips. Moreover, what happens after every potential consumer already has an IP TV set top box? While telcos providing the IP TV service have recurring revenues (monthly subscriptions), the set top box is sold only once every 5 years or more. This can put pressure in the earnings multiple in the future.

Balancing the potential and the risks I wont invest in SIGM's shares at this point, but good luck if you own it :)

Oh yeaaaah. Up, Up, and away!

http://stockcharts.com/h-sc/ui?s=SIGM&p=D&b=5&g=0&id=59191861522

Sigma Designs, Inc. Reports Fiscal Third Quarter Results
Wednesday November 28, 4:05 pm ET


MILPITAS, Calif.--(BUSINESS WIRE)--Sigma Designs®, Inc. (NASDAQ:SIGM - News), a leading provider of highly integrated system-on-chip, or SoC, solutions that are used to deliver multimedia entertainment throughout the home, today reported financial results for its third fiscal quarter ended November 3, 2007.


Net revenues for the third quarter were $66.2 million, up 56% from $42.5 million for the previous quarter and up 164% from $25.1 million reported for the same period last year. The increase in net revenues was primarily attributable to increased SoC sales to manufacturers of IPTV set-top boxes and Blu-ray players. Net revenues for the first three quarters of fiscal year 2008 were $144.8 million, up 141% from $60.0 million for the same period in the prior fiscal year.

GAAP net income for the quarter was $21.0 million or $0.72 per diluted share. This compares to GAAP net income of $8.6 million, or $0.32 per diluted share for the previous quarter and GAAP net income of $2.7 million or $0.11 per diluted share during the same period one year ago. GAAP net income for the first three quarters of fiscal year 2008 was $34.9 million, or $1.27 per diluted share, compared to net income of $1.6 million, or $0.06 per diluted share, for the same period last year.

Non-GAAP net income for the quarter was $23.0 million or $0.79 per diluted share. This compares to non-GAAP net income of $13.0 million, or $0.48 per diluted share for the previous quarter and a non-GAAP net income of $4.8 million or $0.19 per diluted share during the same period one year ago. Non-GAAP adjustments for the third quarter of fiscal year 2008 consisted of the exclusion of $306,000 in amortization expense of acquired intangibles related to the Blue7 acquisition and $1.7 million in non-cash stock-option compensation expenses. The reconciliation between GAAP and non-GAAP results for all referenced periods is provided in a table immediately following the GAAP financial tables below.

Income tax expense for the quarter was $2.9 million which brings our year to date tax rate to approximately 10%, the rate expected for the balance of this fiscal year.

Management Comment

"We are extremely pleased to report another record setting quarter for the company in terms of revenue and profitability. In our third quarter, we achieved a revenue increase of 56% to reach $66.2 million, our eighth consecutive quarter of double-digit sequential revenue growth. Our outstanding revenue increase was a result of increased demand from the IPTV set-top box market and high definition DVD players. We have established a leadership position in the IPTV market and are benefiting from the widespread ramp in demand from our worldwide base of set-top box and telco customers. We have also established a leadership position in Blu-ray players and are enjoying an early ramp in demand from their increased popularity with consumers. Finally, we are encouraged by increasing customer interest in our products for Ultra-wideband (UWB) connectivity solutions. Looking forward, we maintain our expectation of further top-line growth and profitability for the fourth quarter," stated Thinh Tran, chairman and chief executive officer, Sigma Designs.

Recent business developments include:


Announced that Samsung's new third generation Blu-ray player incorporates Sigma's industry leading media processors. Using Sigma's SMP8634, the BD-P1400 player from Samsung is designed to offer one of the best video and audio performances available, including a number of industry first features.
Announced that Microsoft and Sigma Designs are working together to offer Extender for Windows Media Center middleware ported to the Sigma Designs 8622 Secure Media Processor, enabling a new category of digital media extender products with high quality, low cost solutions to deliver digital content to every room in the home.
Announced that HP, D-Link and Linksys (Cisco), are each launching extenders for Windows Media Center products powered by Sigma media processors. Sigma's media processors are powering the latest media extender products, which include the recently launched HP MediaSmart LCD HDTV, which is the first high-definition TV to have media extenders built-in and available from the TV itself to offer consumers a high-quality, low-cost solution for delivering digital content to every room in a home.
Outlook

The Company expects a continued increase in demand for its products with 10% to 15% growth in net revenues for the fourth quarter compared to the previous quarter. While the Company's gross margin has been stronger than expected in recent quarters, the target remains 50% within a range of 48% to 52%.

Investor Conference Call

The conference call relating to third quarter results will take place following this announcement at 5:00 PM ET today, November 28, 2007. The dial-in number is 866-700-7173 (international callers dial 617-213-8838) and the passcode is 21735684. Investors will have the opportunity to listen live to the conference call via the Internet through www.sigmadesigns.com or over Thomson/CCBN's Investor Distribution Network for both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at www.earnings.com. Institutional investors can access the call via Thomson StreetEvents (www.streetevents.com). To listen to the live call, please go to the Web site at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call by dialing into 1-888-286-8010 (international callers dial 617-801-6888) and use passcode 77048156. The audio replay will be available for one week after the call. For further information, please see the link on our website at www.sigmadesigns.com.

Use of Non-GAAP Financial Information

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Sigma reports non-GAAP net income, which excludes amortization of acquired intangibles, stock-based compensation calculated under APB No. 25 and SFAS No. 123(R) and, with respect to the second fiscal quarter of 2008 non-GAAP results, nonrecurring expenses associated with a tender offer to employees to resolve potential personal income tax exposure and, with respect to the second fiscal quarter of 2007 through the second fiscal quarter of 2008 non-GAAP results, nonrecurring expenses associated with the Company's review of its historical stock option granting practices and related financial restatements for prior periods. Sigma believes that its non-GAAP net income provides useful information to management and investors regarding financial and business trends relating to its financial condition and results of operations. Sigma believes that this non-GAAP net income, in combination with the Company's financial results calculated in accordance with GAAP, provides investors with additional perspective. Sigma also believes the non-GAAP measures provide useful supplemental information for investors to evaluate its operating results in the same manner as the research analysts that follow Sigma, all of whom present non-GAAP projections in their published reports. As such, the non-GAAP measures provided by Sigma facilitate a more direct comparison of its performance with the financial projections published by the analysts as well as its competitors, many of whom report financial results on a non-GAAP basis. The economic substance behind its decision to use such non-GAAP measures is that such measures approximate its controllable operating performance more closely than the most directly comparable GAAP financial measures. For example, Sigma's management has no control over certain variables that have a major influence in the determination of share-based compensation such as the volatility of its stock price and changing interest rates. With respect to Sigma's stock option review and related restatement costs and expenses associated with its tender offer, the unique nature of these costs may limit the comparability of its on-going operations with prior and future periods. Sigma believes that all of these excluded expenses do not accurately reflect the underlying performance of its continuing operations for the period in which they are incurred, even though some of these excluded items may be incurred and reflected in Sigma's GAAP financial results in the foreseeable future.

The material limitation associated with the use of the non-GAAP financial measures is that the non-GAAP measures do not reflect the full economic impact of the Sigma's activities. Sigma's non-GAAP net income is not prepared in accordance with GAAP, is not an alternative to GAAP financial information, and may be calculated differently than non-GAAP financial information disclosed by other companies. Accordingly, investors are cautioned not to place undue reliance on non-GAAP information.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding Sigma's gross margin target and expectation of growth in net revenues for the fourth fiscal quarter. Actual results may vary materially due to a number of factors including, but not limited to, the risk that the SEC disagrees with the manner in which Sigma has accounted for and reported, or not reported, the financial impact of past stock option grants, actions by other regulatory agencies as a result of Sigma's past stock option practices, ongoing derivative litigation, a determination, upon completion of further quarterly closing and review procedures, that the financial results for the third quarter of fiscal year 2008 are different than the results set forth in this press release, general economic conditions, including continuance of the current economic conditions specific to the semiconductor industry, the rate of growth of the IPTV, high definition DVD and HDTV markets in general, the ramp in demand from our set-top box and telecommunication customers, our ability to deploy and achieve market acceptance for Sigma products in these markets, the ability of our SoCs to compete with other technologies or products in these emerging markets, the risk that such products will not gain widespread acceptance, or will be rendered obsolete, by product offerings of competitors or by alternative technologies, the risk that anticipated design wins will not materialize and that actual design wins will not translate into launched product offerings, and other risks including delays in the manufacturer's deployment of set-top boxes or consumer products. Other risk factors are detailed from time to time in our SEC reports, including our quarterly report on Form 10-Q as filed September 13, 2007. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Sigma undertakes no obligation to publicly release or otherwise disclose the result of any revision to these forward-looking statements that may be made as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

About Sigma Designs, Inc.

Sigma Designs (NASDAQ:SIGM - News) is a leading fabless provider of highly integrated system-on-chip, or SoC, solutions that are used to deliver multimedia entertainment throughout the home. Sigma's SoC solutions combine its semiconductors and software and are a critical component of multiple high-growth, consumer applications that process digital video and audio content, including internet protocol TV, or IPTV, high definition DVD players, high definition TVs, or HDTVs, and portable media players. Headquartered in Milpitas, Calif., the Company also has sales representatives in the United States, Belgium, China, Japan and Taiwan and sells its products through third-party distributors in Japan and Korea. For more information, please visit the Company's web site at www.sigmadesigns.com. REALmagic and Sigma Designs are registered trademarks of Sigma Designs, Inc. All other products and companies referred to herein are trademarks or registered trademarks of their respective companies.

SIGMA DESIGNS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS 
GAAP 
(In thousands) 
       
     

   November 3,

2007
  February 3,

2007 1

Assets     
       
Current assets:     
Cash and cash equivalents  $  164,899   $  24,413   
Short-term investments   85,847    8,791   
Accounts receivable, net   30,405    11,231   
Inventories    18,894    16,003   
Prepaid expenses and other current assets     2,248      1,095     
Total current assets   302,293    61,533   
       
Long term marketable securities   12,335    -   
Equipment and leasehold improvements, net   5,041    3,364   
Long-term investments   263    263   
Goodwill    5,020    5,020   
Intangible assets, net    4,609    5,527   
Other non-current assets     436      377     
       
Total assets  $  329,997   $  76,084     
       
Liabilities and shareholders' equity     
       
Current liabilities:     
Accounts payable  $  15,475   $  13,723   
Accrual liabilities and other   11,557    8,800   
Current portion of bank term loan     -      226     
Total current liabilities   27,032    22,749   
       
Long term portion of bank term loan   -    15   
Other long-term liabilities     673      348     
Total liabilities   27,705    23,112   
       
Shareholders' equity:     
Total shareholders' equity     302,292      52,972     
       
Total liabilities and shareholders' equity  $  329,997   $  76,084     
         
1 February 3, 2007 balances have been derived from the audited financial statements as of the same date.

SIGMA DESIGNS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(GAAP)

(In thousands, except per share data) 
             
Three months ended   Nine months ended 
Nov. 3, 2007   Oct. 28, 2006   Nov. 3, 2007   Oct. 28, 2006 
Net revenues  $  66,244    $  25,055    $  144,808    $  59,990   
         
Cost of revenues     31,017         13,017         69,463         31,560     
Gross Profit   35,227     12,038     75,345     28,430   
Gross Margin Percent   53.2  %    48.0  %    52.0  %    47.4  % 
         
Operating expenses:         
Research and development   7,488     5,581     21,941     15,847   
Sales and marketing   2,785     1,921     7,709     5,406   
General and administrative     2,541         1,839         9,246         5,942     
Total operating expenses   12,814     9,341     38,896     27,195   
         
Income (loss) from operations   22,413     2,697     36,449     1,235   
Interest and other income, net     1,446         149         2,166         504
   
         
Income before income taxes   23,859     2,846     38,615     1,739
 
Provision for income taxes     2,909         104         3,708         137     
         
Net income  $  20,950      $  2,742      $  34,907      $  1,602
   
         
Net income per share:         
Basic  $  0.80
     $  0.12      $  1.43      $  0.07     
Diluted  $  0.72      $  0.11      $  1.27      $  0.06     
         
Weighted average common shares:         
Basic   26,234     22,794     24,360     22,642   
Diluted   28,958     25,572     27,532     25,365   
SIGMA DESIGNS, INC.

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

(Unaudited)

(In thousands, except per share data) 
             
Three months ended   Nine months ended 
Nov. 3, 2007   Oct. 28, 2006   Nov. 3, 2007   Oct. 28, 2006 
GAAP net income  $  20,950   $  2,742   $  34,907   $  1,602

         
Items reconciling GAAP net income         
to non-GAAP net income:         
         
Included in Cost of Revenues:         
Amortization of acquired developed technology         
189    189    567    536 
Share-based compensation   130    118    319    291 
Tender offer exchange employee options     ---      --      135      -- 
Total related to cost of revenues     319      307      1,021      827 
       
Included in Operating expenses:         
Research and development:         
Amortization of acquired noncompete agreement         
117    117    351    331 
Share-based compensation   762    604    2,315    1,795 
Tender offer to exchange employee options   ---    ---    1,518    --- 
Sales and marketing:
       
Share-based compensation   338    207    826    599 
Tender offer to exchange employee options   ---    ---    388    --- 
General and administrative:
       
Share-based compensation   468    341    1,277    944 
Tender offer to exchange employee options   ---    ---    326    --- 
Professional service fees and expenses from stock option review and related restatements
  ---    511    1,491    1,114 
Total related to operating expenses     1,685      1,780      8,492      4,783 
         
Net effects of proforma adjustments     2,004      2,087      9,513      5,610 
         
Non-GAAP net income  $  22,954   $  4,829   $  44,420   $  7,212

         
Non-GAAP net income per diluted share  $  0.79   $  0.19   $  1.61   $  0.28 




Contact:
Sigma Designs, Inc.
Ed McGregor, 646-259-2999 (Investor Relations)
[email protected]

--------------------------------------------------------------------------------

Oh yeaaaah. Up, Up, and away!

http://stockcharts.com/h-sc/ui?s=SIGM&p=D&b=5&g=0&id=59191861522

Sigma Designs, Inc. Reports Fiscal Third Quarter Results
Wednesday November 28, 4:05 pm ET


MILPITAS, Calif.--(BUSINESS WIRE)--Sigma Designs®, Inc. (NASDAQ:SIGM - News), a leading provider of highly integrated system-on-chip, or SoC, solutions that are used to deliver multimedia entertainment throughout the home, today reported financial results for its third fiscal quarter ended November 3, 2007.


Net revenues for the third quarter were $66.2 million, up 56% from $42.5 million for the previous quarter and up 164% from $25.1 million reported for the same period last year. The increase in net revenues was primarily attributable to increased SoC sales to manufacturers of IPTV set-top boxes and Blu-ray players. Net revenues for the first three quarters of fiscal year 2008 were $144.8 million, up 141% from $60.0 million for the same period in the prior fiscal year.

GAAP net income for the quarter was $21.0 million or $0.72 per diluted share. This compares to GAAP net income of $8.6 million, or $0.32 per diluted share for the previous quarter and GAAP net income of $2.7 million or $0.11 per diluted share during the same period one year ago. GAAP net income for the first three quarters of fiscal year 2008 was $34.9 million, or $1.27 per diluted share, compared to net income of $1.6 million, or $0.06 per diluted share, for the same period last year.

Non-GAAP net income for the quarter was $23.0 million or $0.79 per diluted share. This compares to non-GAAP net income of $13.0 million, or $0.48 per diluted share for the previous quarter and a non-GAAP net income of $4.8 million or $0.19 per diluted share during the same period one year ago. Non-GAAP adjustments for the third quarter of fiscal year 2008 consisted of the exclusion of $306,000 in amortization expense of acquired intangibles related to the Blue7 acquisition and $1.7 million in non-cash stock-option compensation expenses. The reconciliation between GAAP and non-GAAP results for all referenced periods is provided in a table immediately following the GAAP financial tables below.

Income tax expense for the quarter was $2.9 million which brings our year to date tax rate to approximately 10%, the rate expected for the balance of this fiscal year.

Management Comment

"We are extremely pleased to report another record setting quarter for the company in terms of revenue and profitability. In our third quarter, we achieved a revenue increase of 56% to reach $66.2 million, our eighth consecutive quarter of double-digit sequential revenue growth. Our outstanding revenue increase was a result of increased demand from the IPTV set-top box market and high definition DVD players. We have established a leadership position in the IPTV market and are benefiting from the widespread ramp in demand from our worldwide base of set-top box and telco customers. We have also established a leadership position in Blu-ray players and are enjoying an early ramp in demand from their increased popularity with consumers. Finally, we are encouraged by increasing customer interest in our products for Ultra-wideband (UWB) connectivity solutions. Looking forward, we maintain our expectation of further top-line growth and profitability for the fourth quarter," stated Thinh Tran, chairman and chief executive officer, Sigma Designs.

Recent business developments include:


Announced that Samsung's new third generation Blu-ray player incorporates Sigma's industry leading media processors. Using Sigma's SMP8634, the BD-P1400 player from Samsung is designed to offer one of the best video and audio performances available, including a number of industry first features.
Announced that Microsoft and Sigma Designs are working together to offer Extender for Windows Media Center middleware ported to the Sigma Designs 8622 Secure Media Processor, enabling a new category of digital media extender products with high quality, low cost solutions to deliver digital content to every room in the home.
Announced that HP, D-Link and Linksys (Cisco), are each launching extenders for Windows Media Center products powered by Sigma media processors. Sigma's media processors are powering the latest media extender products, which include the recently launched HP MediaSmart LCD HDTV, which is the first high-definition TV to have media extenders built-in and available from the TV itself to offer consumers a high-quality, low-cost solution for delivering digital content to every room in a home.
Outlook

The Company expects a continued increase in demand for its products with 10% to 15% growth in net revenues for the fourth quarter compared to the previous quarter. While the Company's gross margin has been stronger than expected in recent quarters, the target remains 50% within a range of 48% to 52%.

Investor Conference Call

The conference call relating to third quarter results will take place following this announcement at 5:00 PM ET today, November 28, 2007. The dial-in number is 866-700-7173 (international callers dial 617-213-8838) and the passcode is 21735684. Investors will have the opportunity to listen live to the conference call via the Internet through www.sigmadesigns.com or over Thomson/CCBN's Investor Distribution Network for both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at www.earnings.com. Institutional investors can access the call via Thomson StreetEvents (www.streetevents.com). To listen to the live call, please go to the Web site at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call by dialing into 1-888-286-8010 (international callers dial 617-801-6888) and use passcode 77048156. The audio replay will be available for one week after the call. For further information, please see the link on our website at www.sigmadesigns.com.

Use of Non-GAAP Financial Information

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Sigma reports non-GAAP net income, which excludes amortization of acquired intangibles, stock-based compensation calculated under APB No. 25 and SFAS No. 123(R) and, with respect to the second fiscal quarter of 2008 non-GAAP results, nonrecurring expenses associated with a tender offer to employees to resolve potential personal income tax exposure and, with respect to the second fiscal quarter of 2007 through the second fiscal quarter of 2008 non-GAAP results, nonrecurring expenses associated with the Company's review of its historical stock option granting practices and related financial restatements for prior periods. Sigma believes that its non-GAAP net income provides useful information to management and investors regarding financial and business trends relating to its financial condition and results of operations. Sigma believes that this non-GAAP net income, in combination with the Company's financial results calculated in accordance with GAAP, provides investors with additional perspective. Sigma also believes the non-GAAP measures provide useful supplemental information for investors to evaluate its operating results in the same manner as the research analysts that follow Sigma, all of whom present non-GAAP projections in their published reports. As such, the non-GAAP measures provided by Sigma facilitate a more direct comparison of its performance with the financial projections published by the analysts as well as its competitors, many of whom report financial results on a non-GAAP basis. The economic substance behind its decision to use such non-GAAP measures is that such measures approximate its controllable operating performance more closely than the most directly comparable GAAP financial measures. For example, Sigma's management has no control over certain variables that have a major influence in the determination of share-based compensation such as the volatility of its stock price and changing interest rates. With respect to Sigma's stock option review and related restatement costs and expenses associated with its tender offer, the unique nature of these costs may limit the comparability of its on-going operations with prior and future periods. Sigma believes that all of these excluded expenses do not accurately reflect the underlying performance of its continuing operations for the period in which they are incurred, even though some of these excluded items may be incurred and reflected in Sigma's GAAP financial results in the foreseeable future.

The material limitation associated with the use of the non-GAAP financial measures is that the non-GAAP measures do not reflect the full economic impact of the Sigma's activities. Sigma's non-GAAP net income is not prepared in accordance with GAAP, is not an alternative to GAAP financial information, and may be calculated differently than non-GAAP financial information disclosed by other companies. Accordingly, investors are cautioned not to place undue reliance on non-GAAP information.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding Sigma's gross margin target and expectation of growth in net revenues for the fourth fiscal quarter. Actual results may vary materially due to a number of factors including, but not limited to, the risk that the SEC disagrees with the manner in which Sigma has accounted for and reported, or not reported, the financial impact of past stock option grants, actions by other regulatory agencies as a result of Sigma's past stock option practices, ongoing derivative litigation, a determination, upon completion of further quarterly closing and review procedures, that the financial results for the third quarter of fiscal year 2008 are different than the results set forth in this press release, general economic conditions, including continuance of the current economic conditions specific to the semiconductor industry, the rate of growth of the IPTV, high definition DVD and HDTV markets in general, the ramp in demand from our set-top box and telecommunication customers, our ability to deploy and achieve market acceptance for Sigma products in these markets, the ability of our SoCs to compete with other technologies or products in these emerging markets, the risk that such products will not gain widespread acceptance, or will be rendered obsolete, by product offerings of competitors or by alternative technologies, the risk that anticipated design wins will not materialize and that actual design wins will not translate into launched product offerings, and other risks including delays in the manufacturer's deployment of set-top boxes or consumer products. Other risk factors are detailed from time to time in our SEC reports, including our quarterly report on Form 10-Q as filed September 13, 2007. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Sigma undertakes no obligation to publicly release or otherwise disclose the result of any revision to these forward-looking statements that may be made as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

About Sigma Designs, Inc.

Sigma Designs (NASDAQ:SIGM - News) is a leading fabless provider of highly integrated system-on-chip, or SoC, solutions that are used to deliver multimedia entertainment throughout the home. Sigma's SoC solutions combine its semiconductors and software and are a critical component of multiple high-growth, consumer applications that process digital video and audio content, including internet protocol TV, or IPTV, high definition DVD players, high definition TVs, or HDTVs, and portable media players. Headquartered in Milpitas, Calif., the Company also has sales representatives in the United States, Belgium, China, Japan and Taiwan and sells its products through third-party distributors in Japan and Korea. For more information, please visit the Company's web site at www.sigmadesigns.com. REALmagic and Sigma Designs are registered trademarks of Sigma Designs, Inc. All other products and companies referred to herein are trademarks or registered trademarks of their respective companies.

SIGMA DESIGNS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS 
GAAP 
(In thousands) 
       
     

   November 3,

2007
  February 3,

2007 1

Assets     
       
Current assets:     
Cash and cash equivalents  $  164,899   $  24,413   
Short-term investments   85,847    8,791   
Accounts receivable, net   30,405    11,231   
Inventories    18,894    16,003   
Prepaid expenses and other current assets     2,248      1,095     
Total current assets   302,293    61,533   
       
Long term marketable securities   12,335    -   
Equipment and leasehold improvements, net   5,041    3,364   
Long-term investments   263    263   
Goodwill    5,020    5,020   
Intangible assets, net    4,609    5,527   
Other non-current assets     436      377     
       
Total assets  $  329,997   $  76,084     
       
Liabilities and shareholders' equity     
       
Current liabilities:     
Accounts payable  $  15,475   $  13,723   
Accrual liabilities and other   11,557    8,800   
Current portion of bank term loan     -      226     
Total current liabilities   27,032    22,749   
       
Long term portion of bank term loan   -    15   
Other long-term liabilities     673      348     
Total liabilities   27,705    23,112   
       
Shareholders' equity:     
Total shareholders' equity     302,292      52,972     
       
Total liabilities and shareholders' equity  $  329,997   $  76,084     
         
1 February 3, 2007 balances have been derived from the audited financial statements as of the same date.

SIGMA DESIGNS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(GAAP)

(In thousands, except per share data) 
             
Three months ended   Nine months ended 
Nov. 3, 2007   Oct. 28, 2006   Nov. 3, 2007   Oct. 28, 2006 
Net revenues  $  66,244    $  25,055    $  144,808    $  59,990   
         
Cost of revenues     31,017         13,017         69,463         31,560     
Gross Profit   35,227     12,038     75,345     28,430   
Gross Margin Percent   53.2  %    48.0  %    52.0  %    47.4  % 
         
Operating expenses:         
Research and development   7,488     5,581     21,941     15,847   
Sales and marketing   2,785     1,921     7,709     5,406   
General and administrative     2,541         1,839         9,246         5,942     
Total operating expenses   12,814     9,341     38,896     27,195   
         
Income (loss) from operations   22,413     2,697     36,449     1,235   
Interest and other income, net     1,446         149         2,166         504
   
         
Income before income taxes   23,859     2,846     38,615     1,739
 
Provision for income taxes     2,909         104         3,708         137     
         
Net income  $  20,950      $  2,742      $  34,907      $  1,602
   
         
Net income per share:         
Basic  $  0.80
     $  0.12      $  1.43      $  0.07     
Diluted  $  0.72      $  0.11      $  1.27      $  0.06     
         
Weighted average common shares:         
Basic   26,234     22,794     24,360     22,642   
Diluted   28,958     25,572     27,532     25,365   
SIGMA DESIGNS, INC.

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

(Unaudited)

(In thousands, except per share data) 
             
Three months ended   Nine months ended 
Nov. 3, 2007   Oct. 28, 2006   Nov. 3, 2007   Oct. 28, 2006 
GAAP net income  $  20,950   $  2,742   $  34,907   $  1,602

         
Items reconciling GAAP net income         
to non-GAAP net income:         
         
Included in Cost of Revenues:         
Amortization of acquired developed technology         
189    189    567    536 
Share-based compensation   130    118    319    291 
Tender offer exchange employee options     ---      --      135      -- 
Total related to cost of revenues     319      307      1,021      827 
       
Included in Operating expenses:         
Research and development:         
Amortization of acquired noncompete agreement         
117    117    351    331 
Share-based compensation   762    604    2,315    1,795 
Tender offer to exchange employee options   ---    ---    1,518    --- 
Sales and marketing:
       
Share-based compensation   338    207    826    599 
Tender offer to exchange employee options   ---    ---    388    --- 
General and administrative:
       
Share-based compensation   468    341    1,277    944 
Tender offer to exchange employee options   ---    ---    326    --- 
Professional service fees and expenses from stock option review and related restatements
  ---    511    1,491    1,114 
Total related to operating expenses     1,685      1,780      8,492      4,783 
         
Net effects of proforma adjustments     2,004      2,087      9,513      5,610 
         
Non-GAAP net income  $  22,954   $  4,829   $  44,420   $  7,212

         
Non-GAAP net income per diluted share  $  0.79   $  0.19   $  1.61   $  0.28 




Contact:
Sigma Designs, Inc.
Ed McGregor, 646-259-2999 (Investor Relations)
[email protected]

A gain of $10.45 today!!  :o
I would say they were pleased with earnings report.

Yes, they blew away the published consensus top and bottom, but I'm sure the "whisper" #'s were higher than the consensus. Even so, I think they beat most all expectations, at least mine anyway.  ;D

I know my valuation model (above on this thread) said SIGM would rise 33% a year going forward and at the time I considered SIGM attractive, but not enough to buy for the Main Portfolio. But I sure wasn't expecting EPS to more than double from one quarter to the next:

• Sigma Designs, Inc. Reports Fiscal Third Quarter Results (http://biz.yahoo.com/bw/071128/20071128006060.html?.v=1)
Business Wire (Wed, Nov 28)

«GAAP net income for the quarter was $21.0 million or $0.72 per diluted share. This compares to GAAP net income of $8.6 million, or $0.32 per diluted share for the previous quarter and GAAP net income of $2.7 million or $0.11 per diluted share during the same period one year ago.»

I'm not so sure if SIGM can never be a $5 B business anymore. I'm willing to open my mind and accept realcoolhead's suggestion of moving up a bit in the market cap arena, from micro-caps to perhaps $1 B - $3 B market caps. These still have "tenbagger potential" and look less risky. SIGM, with a $1.65 B market cap, will be the largest company in the Main Portfolio.

I've been seeing medium and large caps sporting a higher valuation than micro caps. I believe this happens because most mutual funds don't even bother looking at micro caps, they're too small to be worth the effort. I've seen $5 B - $10 B companies with p/e ratios of 50 or even 100 or more and then double and triple in price. It seems fund managers don't have a problem about pushing medium caps 2 or 3 times higher even if they seem overvalued ... but micro caps can be incredibly cheap, and they don't touch them.

Anyway, I'll hold the current micro-caps for as long as I find them attractive from a fundamental standpoint.

SIGM, trading at 23 times the $0.72 EPS (annualized) it earned in the latest quarter, doesn't seem all that overvalued, for a company which more than doubled EPS from the previous quarter (and rose EPS 554% from a year ago). Why not push this to 50 times earnings? I've seen it happen.

Trading Plan:

Buy SIGM, 6.66% of capital (I'm going slightly into margin here, since I have just 4.6% of available cash - but it's just 2%, no big deal).

This felt solid. Thanks realcoolhead, BigSully1 and Houlahan :)

I'll keep holding SIGM (gee, I'm late, sorry).

SIGM is so big (relatively speaking in the Main's context) that I feel like I don't even need to analyze it much. It's so easy I'll feel overpaid whenever I sell the stock for a big profit lol.

I've been a small and micro cap kind of investor but have to recognize that owning stocks in the $1 B to $5 B range certainly would make me sleep better at night.

I remember when AussieTrader alerted me about FSLR when it was around $50 and I said "it's a $3 B plus market cap, what's the point?". How wrong and silly I was. FSLR closed at $250 yesterday and it is a $19.5 B market cap company now :'(

Five bags in six months given by a $3 B plus market cap company :o

Can SIGM do the same? Well, I don't know, but IPTV is as hot as solar energy and SIGM is the market leader in the space. SIGM isn't growing as rapidly as FSLR, but still, SIGM's EPS more than doubled from one quarter to the next and SIGM trades at 25 times the latest quarter EPS (annualized), while FSLR trades at 108 times its latest quarter's EPS (also annualized).

I don't know what the potential is, I'll just keep holding SIGM for the long term.

QuoteSIGM is so big (relatively speaking in the Main's context) that I feel like I don't even need to analyze it much. It's so easy I'll feel overpaid whenever I sell the stock for a big profit lol.

I've been a small and micro cap kind of investor but have to recognize that owning stocks in the $1 B to $5 B range certainly would make me sleep better at night.

I had to open my big mouth didn't I? SIGM replied: "you want trouble? I'll give you trouble" >:D

I'll gladly take the trouble of making a more in depth analysis on SIGM, but unfortunately I have no more time today. Tomorrow I'll take care of SIGM.

I'll keep holding SIGM.

Cramer just gave this one a $100/share target price! ;)

hmm, I am going to wait for the stochastic to get to just below 30% before I pull the triguer.

I am no technician but do you guys think this one may close the gap around $59/share before it goes back up towards $100/share.  ;D

QuoteCramer just gave this one a $100/share target price! ;)

Thanks for the information pinoleropuro. I'm interested in his reasons, here they are:

«Cramer singled out one tech stock for investors to consider: Sigma Designs (SIGM), which he described as a play on the slow demise of cable companies and the rise of telephone companies competing for those services.

Cable companies are losing tons of subscribers, he said. Meanwhile, AT&T, in addition to a big buyback, has announced plans to spend $5 billion on its U-verse TV service in the next few years.

Sigma, Cramer said, should get a big cut of that money as it designs and makes the chips for the set-top boxes. The company, he said, blew its earnings out of the water last time it reported, which caused analysts to aggressively raise their price targets.

Cramer said he's been waiting for a pullback to recommend the stock. It's come down, he said, because they can't make enough product to meet demand. That's a high quality problem to have and leaves SIGM with pricing power.»

There's also a good thread on SIGM's Yahoo Finance message board:

Did anyone see ATT (T) estimate 500-600% growth for U-verse (http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_S/threadview?m=tm&bn=16566&tid=135237&mid=135237&tof=1&frt=2)

All this looks very promising for SIMG.

I'm not feeling well today :P, I'll just send the newsletter and go to the doctor, see you.

Ouch...when Cramer says to buy it's time to sell :-)

David, take care of your health...I have heard you many times saying you do not feel well, and health is the first thing to consider!

But please never give up to your great job you are doing with 3SOF! ;-)

Samsung's New Home Theater-in-a-Box (HTiB) Powered by Sigma Designs
Business Editors/Technology Writers

MILPITAS, Calif.--(BUSINESS WIRE)--December 14, 2007--Sigma Designs
(Nasdaq:SIGM), a leading provider of highly integrated system-on-a-chip (SoC)
solutions, today announced that its highly integrated SMP8634 media processor
was selected by Samsung Electronics Co., Ltd. to power its new HT-BD2 home
theater-in-a-box (HTiB), the first home theater product to combine a Blu-ray
player and sound system into one product offering.

Our innovative home theater-in-a-box is the first to combine a Blu-ray player
and sound system in one and consumers can now enjoy the full HD 1080p cinematic
video quality of a Samsung Blu-ray disc player with an immersive audio
experience that takes watching movies to a whole new level, said Mr. M. S.
Bang, Vice President, Digital AV Division, Samsung Electronics. We selected to
use Sigma`s SMP8634 chip as it enables everything our home theater enthusiast
customers demand, specifically the highest quality in picture and sound.

Samsung`s HT-BD2 HTiB delivers full HD 1080p cinematic video quality with an
immersive audio experience. It includes a HT-BD2 7.1 channel HD receiver
speaker system that supports Dolby TrueHD and DTS-HD Master bitstream audio
format for richer, deep and powerful sound. Its Blu-ray player, powered by a
Sigma SoC, offers full compatibility with 24 movie frames per second playback
reproducing movies in their native format. As a majority of movies are filmed
at 24 frames per second, the HT-BD2 is able to playback movies in their native
format, reducing unwanted artifacts. The HT-BD2 is also compatible with many of
today`s HDTVs.

Sigma is excited to participate in this innovative HTiB product category with
Samsung, said Ken Lowe, vice president of strategic marketing at Sigma
Designs. The SMP8634 is the basis for a large number of leading edge consumer
products and its features and performance were a natural fit for the HTiB.

About Blu-ray

Blu-ray (Blu-ray Disc or BD) is a leading standard in the market for
next-generation, high-definition optical players, which is based on blue laser
disc technology. Blu-ray offers consumers the highest quality viewing
experience which includes high definition video at 1080p resolution,
picture-in-picture video, high definition multi-channel audio, 3D style
graphics and enhanced interactive features such as real time director's
comments, pop-up menus, and more.

About Sigma SoCs

Sigma provides advanced media processor silicon and software that constitute a
system-on-a-chip (SoC) solution for designing Blu-ray or HD-DVD players,
enabling customers to focus on software development and value-added features
that extend beyond basic operation. The next-generation technology contained in
Sigma`s SMP8634 media processor enables players to offer stunning, precise
pictures and remarkably beautiful sound as well as intelligent interactive
features.

About Sigma Designs, Inc.

Sigma Designs is a leading fabless provider of highly integrated
system-on-chip, or SoC, solutions that are used to deliver multimedia
entertainment throughout the home. Sigma`s SoC solutions combine its
semiconductors and software and are a critical component of multiple
high-growth, consumer applications that process digital video and audio
content, including internet protocol TV, or IPTV, high definition DVD players,
high definition TVs, or HDTVs, and portable media players. Headquartered in
Milpitas, Calif., Sigma Designs also has sales representatives in the United
States, Belgium, China, Japan and Taiwan and sells its products through a
third-party distributor in Korea. For more information, please visit Sigma
Designs web site at www.sigmadesigns.com.

Safe Harbor Statement

This press release may contain forward-looking statements, including statements
about the projected timing and extent of customer shipments as well as the
expected use of Sigma`s media processor and wireless chipset products. Actual
results could vary from those projected in the forward looking statements as a
result of various factors, including worldwide economic conditions, changes in
the customer`s ability or desire to complete the rollout, consumer reaction to
the new products and services being offered, the ability of Sigma to deliver
sufficient quantity and quality of MPEG decoder chips, prices for the Sigma
chips, alternative offerings by competitors, and the ability of the parties to
work together successfully to achieve the rollout.

Sigma Designs, Inc.
Ken Lowe, 408-957-9850
[email protected]

SIGM filed an SEC form requesting shareholder's approval to increase the number of authorized shares from the current 37 million to 102 million:

Form DEF 14A -- Other definitive proxy statements (http://www.sec.gov/Archives/edgar/data/790715/000104746907010156/a2181779zdef14a.htm)

Probably management is planning to do a stock split. I'm not worried about this because SIGM's balance sheet shows $249 M in cash and marketable securities and total debt is just $27 M.

I guess the stock just had to come down to close the gap at $59.7, just like in happened in point "2" on the chart below. Pinoleropuro did well in waiting for this entry point. I hope he indeed buy the shares on the closing of the gap and I admire his patience before buying.

I'll keep holding SIGM for the long term.

WATCH LIST MISSING YOU!

Hi David,

what about to propose every week a good stock, small or medium, and post it on the watch list as a strong buy?

I think this could benefit all the community who can invest money also in other stocks that are not comprised in the main portfolio.

Now the watch list is sometimes updated and sometimes not, while I think is a very powerful tool we could together use.

Ciao from Italy,

A.

Hi

It's another chance to get in this stock for those that haven't bought it yet ..
$57-$57.5  will be a one time offer  ;D

I'm waiting for it . It should perform very well soon .

I agree except I think it might bounce off the 50sma at 58.53
http://www.stockta.com/cgi-bin/analysis.pl?symb=SIGM&num1=1&cobrand=&mode=stock (http://www.stockta.com/cgi-bin/analysis.pl?symb=SIGM&num1=1&cobrand=&mode=stock)

Quote from: Garoh on December 22, 2007, 07:41:31 PM
Hi

It's another chance to get in this stock for those that haven't bought it yet ..
$57-$57.5  will be a one time offer  ;D

I'm waiting for it . It should perform very well soon .

I hope you're right (again) Garoh, SIGM has been the ugly duck of the Main Portfolio over the last few days.

I went for a higher degree of safety here, buying a $1.5 B plus market cap company, and so far what I have is a 16.9% loss on the head :P Technically nothing unusual or trend changing has happened, just a normal correction.

Fundamentally there's a lot of controversy, not with the company itself, but with shares. People are scared by the proposed increase in the # of authorized shares from the current 37 million to 102 million (I personally believe the company will announce a stock split, but I'm not sure) and also because insiders have been selling shares ... there's a good post on Yahoo Finance about insiders selling SIGM:

Insiders are NOT "dumping" (http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_S/threadview?m=tm&bn=16566&tid=136613&mid=136687&tof=5&rt=2&frt=2&off=1)

The company reported $0.72 EPS in Q3 2007 and it gave guidance saying Q4 will be even better:

«The Company expects a continued increase in demand for its products with 10% to 15% growth in net revenues for the fourth quarter compared to the previous quarter.»

I'd say EPS in Q4 2007 will be about $0.80 ... analysts expect $0.82.

Anyway, the real issue around SIGM are profit margins:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=42759;image)

You see, analysts expect 56.5% revenue growth in fiscal 2008, but just 5.3% growth in EPS. This would mean a sharp reduction in gross and net profit margins, which were 53.2% and 31.2%, respectively, in Q3 2007.

Historically SIGM's gross margin has been between 48% and 52%, and management expects that to continue:

«While the Company's gross margin has been stronger than expected in recent quarters, the target remains 50% within a range of 48% to 52%.»

And what about net profit margin? Well, the tax rate was just 12.2% in Q3 2007. This is much lower than average and probably it has to do with tax loss carry forwards. If the tax rate were a more "normal" 40%, then net profit margin would be reduced by about 10 percentage points to 21.6%. With a 21.6% net profit margin and $344 M in revenue, fiscal 2008 net income would then be $74 M. If we consider the share count will rise 10% this would mean EPS of $2.32, below the $2.60 expected by analysts for fiscal 2008.

With $2.32 EPS the forward p/e would be 24.5, which seems expensive, given that EPS would be lower in 2008 than in 2007.

SIGM reminds me a lot of NVTL and SWIR, stocks in a hot industry within the technology space. Suddenly competition kicks in, margins are compressed and the earnings multiple is reduced. NVTL and SWIR were cut in half recently ... if the same thing were to happen with SIGM we would then see $36.5 a share in the near future.

I guess my first impression of SIGM was the right one and then I got overly enthusiastic about the outstanding 3rd quarter results, not looking into the future or the tax rate issue.

If I wanted to get advantage of  the IPTV trend I should have bought SIGM in the $10 - $30 range. At $68 I was paying too much, getting in late on the technological cycle.

Trading Plan:

I opt to take a loss on SIGM while it's small. The trading plan for SIGM is SELL.

just fyi:
Report Summary
• The value of Sigma Designs (SIGM) stock has
declined in recent weeks in some part due to the
competition concerns and blu-ray dominance.
Unfortunately for bears both concerns have been
magnified as if SIGM is facing Goliath.
• SIGM has processors being deployed by 20 of the
largest carriers. We have found that the superiority of
the 8634 processor has been a winning point for
carriers picking SIGM. The 100 percent market share
SIGM currently enjoys for Microsoft (MSFT) based
IPTV service is only a matter of time before there is
second chip certified and on the market.
• SIGM has an exclusive agreement with UTStarcom
(UTSI) in providing processors for UTSI set-top
boxes. UTSI is the sole equipment provider in Brazil,
India, and market leader in China.
• Blu-ray had brisk sales during the holiday shopping
season compared to HDDVD. During the holiday
shopping season it was hard to miss the shelves of
sold out blu-ray DVDs at any retailer. More content
and players manufactured resulted in higher sales
figures and not a glut on the market.
• We are reiterating our Strong Buy Rating on SIGM and
$100 price target. The Street seems to be overly
concerned with competition and not paying much
attention to the happenings at SIGM who is staying
ahead of the curve.

http://www.knobias.com/research.pdf?id=12464

Sigma Designs pullback to 1-mo. low creates 'opportunity' -- Deutsche Bank
Wednesday, December 26, 2007 13:46ET

By Staff Reporter

NEW YORK, Dec 27, 2007 (Thomson Financial via COMTEX) -- Shares of Sigma Designs Inc. extended losses to a one-month low Wednesday a pullback that Deutsche Banks says has created a "solid entry opportunity" for new investors.

The stock was down 4.7% at $54.11, and has lost 25% since closing at an all-time high of $72.17 on Dec. 10. The stock hit a low of $53.50 in intraday trading Wednesday, the lowest price seen since Nov. 27.

Analyst Sukhi Nagesh said that while there are expectations that Broadcom Corp. and STMicroelectronics will announce competitive products as early as at the Consumer Electronics Show in Las Vegas starting on Jan. 7, but that it typically takes 10 to 12 months from product announcement to a fully-tested and working set-top box. Nagesh said he doesn't see any meaningful risk to his 2008 forecasts for Internet-protocol TV deployments, especially on the Microsoft platform.

"Given the recent pullback, we believe the expected new product announcements by Sigma Designs' competitors to now be fully reflected in the stock," Nagesh said in a research note. "In addition, we believe Sigma Designs itself is likely to make new product announcements at CES."

He reiterated the stock's buy rating and $75 price target.

Quote from: David Randolph on December 26, 2007, 07:25:34 AM

Quote from: Garoh on December 22, 2007, 07:41:31 PM
Hi

It's another chance to get in this stock for those that haven't bought it yet ..
$57-$57.5  will be a one time offer  ;D

I'm waiting for it . It should perform very well soon .

I hope you're right (again) Garoh, SIGM has been the ugly duck of the Main Portfolio over the last few days.  
I went for a higher degree of safety here, buying a $1.5 B plus market cap company, and so far what I have is a 16.9% loss on the head :P Technically nothing unusual or trend changing has happened, just a normal correction.

Fundamentally there's a lot of controversy, not with the company itself, but with shares. People are scared by the proposed increase in the # of authorized shares from the current 37 million to 102 million (I personally believe the company will announce a stock split, but I'm not sure) and also because insiders have been selling shares ... there's a good post on Yahoo Finance about insiders selling SIGM:

Insiders are NOT "dumping" (http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_S/threadview?m=tm&bn=16566&tid=136613&mid=136687&tof=5&rt=2&frt=2&off=1)

The company reported $0.72 EPS in Q3 2007 and it gave guidance saying Q4 will be even better:

«The Company expects a continued increase in demand for its products with 10% to 15% growth in net revenues for the fourth quarter compared to the previous quarter.»

I'd say EPS in Q4 2007 will be about $0.80 ... analysts expect $0.82.

Anyway, the real issue around SIGM are profit margins:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=42759;image)

You see, analysts expect 56.5% revenue growth in fiscal 2008, but just 5.3% growth in EPS. This would mean a sharp reduction in gross and net profit margins, which were 53.2% and 31.2%, respectively, in Q3 2007.

Historically SIGM's gross margin has been between 48% and 52%, and management expects that to continue:

«While the Company's gross margin has been stronger than expected in recent quarters, the target remains 50% within a range of 48% to 52%.»

And what about net profit margin? Well, the tax rate was just 12.2% in Q3 2007. This is much lower than average and probably it has to do with tax loss carry forwards. If the tax rate were a more "normal" 40%, then net profit margin would be reduced by about 10 percentage points to 21.6%. With a 21.6% net profit margin and $344 M in revenue, fiscal 2008 net income would then be $74 M. If we consider the share count will rise 10% this would mean EPS of $2.32, below the $2.60 expected by analysts for fiscal 2008.

With $2.32 EPS the forward p/e would be 24.5, which seems expensive, given that EPS would be lower in 2008 than in 2007.

SIGM reminds me a lot of NVTL and SWIR, stocks in a hot industry within the technology space. Suddenly competition kicks in, margins are compressed and the earnings multiple is reduced. NVTL and SWIR were cut in half recently ... if the same thing were to happen with SIGM we would then see $36.5 a share in the near future.

I guess my first impression of SIGM was the right one and then I got overly enthusiastic about the outstanding 3rd quarter results, not looking into the future or the tax rate issue.

If I wanted to get advantage of  the IPTV trend I should have bought SIGM in the $10 - $30 range. At $68 I was paying too much, getting in late on the technological cycle.

Trading Plan:

I opt to take a loss on SIGM while it's small. The trading plan for SIGM is SELL.

Oops

Sorry I was too busy to reply yeterday  :(
David Yes as I mention that it was a good chance to get in this stock Not to get out  :'(
Well , what I see now is a very nice chart on weekly and daily with at least $73 price target . I neve buy at the top , otherwise my hands will be weak .
David If you have time you can look at these nice stocks which I've been holding since Sepetmber .
MTL
TKC
CF
VIP
AG
Very strong stocks and all of them are running in an uptrend channel .
I'm holding SIGM now .

QuoteDavid Yes as I mention that it was a good chance to get in this stock Not to get out   :'(

I know you said it was a good time to buy, but I still thought it was a good (or at least, not so bad) time to sell.

QuoteWell , what I see now is a very nice chart on weekly and daily with at least $73 price target.

The chart was nice, but fundamentals were not, at least not in my view. The stock yesterday closed 22.5% below my selling price just a few days ago (and I lost 17% on this trade).

SIGM taught me to always pay attention to the influence of taxes in EPS results and net profit margin, because the low tax rate probably won't be there in the near future.

QuoteSIGM reminds me a lot of NVTL and SWIR, stocks in a hot industry within the technology space. Suddenly competition kicks in, margins are compressed and the earnings multiple is reduced. NVTL and SWIR were cut in half recently ... if the same thing were to happen with SIGM we would then see $36.5 a share in the near future.

Will SIGM drop to $36.5 in the future? I don't know, but I'm not bullish on the stock.

Are you still holding garoh? If you are, I wish you very good luck and thank you for expressing your views. Only people that never make a point about a stock are never wrong.

SIMG got even cheaper, but it appears it's trending higher now, as you can see in the chart below.

The volume and price spike in mid February was due to the following news:

• Silicon Image Jumps; Two Firms File 13-Gs (http://us.rd.yahoo.com/finance/external/xbarronsblog/SIG=12vl2j16s/*http://blogs.barrons.com/techtraderdaily/2008/02/13/silicon-image-jumps-two-firms-file-13-gs/?mod=yahoobarrons)
at Barron's Online (Wed, Feb 13)

I'm glad I took that relatively small loss on SIGM (sold at $56.82) as I was expecting the stock to go down to the $36 area, but $20? :o

The stock closed yesterday at just 10.5 times the 2008 EPS average estimate (http://finance.yahoo.com/q/ae?s=sigm).

What happened in point 1?

• Sigma Designs Plunges on 1Q Outlook (http://biz.yahoo.com/ap/080313/sigma_designs_mover.html?.v=2)
AP (Thu, Mar 13)

Remember the following?

QuoteFundamentally there's a lot of controversy, not with the company itself, but with shares. People are scared by the proposed increase in the # of authorized shares from the current 37 million to 102 million (I personally believe the company will announce a stock split, but I'm not sure) and also because insiders have been selling shares ...

I don't see any stock split ...

I guess management is diluting shareholders value in a massive way, even more than what they did historically. This will probably mean the EPS estimates are still high, not because net income will be lower (also a possibility), but because the # of shares outstanding is rising rapidly.

I'll keep SIGM on the Watch List, it seems like an obvious buy from a fundamental standpoint (because the earnings multiple is so low), but the Devil lies in the details, and that increase in the number of authorized shares to the triple has "trouble ahead" written all over it.

Analysts Maintain Sigma Designs'
Position on Set Tops Despite Competitive Fears Trading on Sigma Designs, Incorporated (SIGM) was up 11.104% following Deutsche Bank's maintained buy rating on the belief that fears of
Broadcom gaining market share on IPTV set top boxes was overblown.
Roth Capital also suggested that the company's position in IPTV remains secure, as Broadcom has yet to be designed into a single set top box that supports Microsoft Mediaroom software. According to Infonetics Research, the worldwide IPTV subscriber base is expected to grow
from 12.7M in 2007 to 97.2M in 2011, representing a compound annual growth rate of 66%. Currently, IPTV set-top boxes use one of two platforms based on software developed by either Microsoft or various Linux providers, each of which offers certain advantages and disadvantages.
For set-top boxes in the IPTV market, Sigma is currently the only provider qualified to ship digital media processing solutions based on the Microsoft IPTV platform. In the high definition DVD player market, its suite of software for Blu-ray players is the most comprehensive offering
available to date. It has built this position by being one of the first multimedia processing semiconductor providers to work extensively with both IPTV and high definition DVD player providers, as well as telecommunications carriers to design solutions that address specific feature and performance requirements. Through this, Sigma has gained insight
into the challenges of its customers and such carriers, as well as visibility into their product development plans. Fears of competitive pressures, however, may have been stoked by the company's admission that its competitors have higher profiles, larger financial resources, and
greater marketing resources, and may develop a competitive product which inhibits the wide acceptance of Sigma's products. Currently, other manufacturers are developing products that will compete directly with its products in the near future.

chart:

I am still in SIMG since last year.  Finally up over 25%.  Chart looks good from mid March,  lets see if we can break through the 7 barrier.  I will not miss this time to take a good profit like I missed last October.  Overall I like the company's space in HDMI and also the 18% reduction of outstanding shares due to stock buyback, and expecting better things going into 2009.   Good health and trading to all.

poli

SIGM getting a haircut today due to less than stellar earnings,  Will be keeping it on my watch list.  I have no position at this time.

poli

SIMG bucked the trend of the overall market today,  with pretty good volume.  Still in,  I was hoping it would survive this weeks downturn in market and push alot higher thru the rest of June.  We will know in fullness of time.

poli