3SOF

Not even GIGM goes up in a straight line so Friday's correction is normal. 3rd quarter earnings will probably be released near November 15.

The estimates I have on my valuation model point to an optimal selling price of $49.32, so I'll continue holding GIGM.

I see that analysts are now expecting $0.95 EPS for GIGM in 2008:



This was because of Bear Stearns initiating coverage. So the stock is trading at $21.7/$0.95 = 22.8 times forward earnings. The Internet Software & Services industry trades at 39.2 times earnings.

Anyway, nobody knows what the impact of the Japanese suite of games, MahJong for $ or Hellgate: London is going to be. $0.95 would be my EPS estimate just with GIGM's current businesses, not considering these new initiatives.

I'll continue holding GIGM for the long term.

GIGM started at BUY from Citi w/ $28 price target

Zacks Recent Price Strength Strategy Highlights: GigaMedia, ICON, Mettler-Toledo and Navios Maritime Holdings
2:01 PM ET - BusinessWire

This stock picking strategy looks for companies trading in the upper range of their 52-week highs that have attractive fundamental attributes. This strategy proves that "trend is your friend" with a +29% return versus +16.7% for the S&P 500 in 2006. This screen is called the Recent Price Strength Profit Track strategy. Four stocks meeting this screen's exclusive criteria are GigaMedia Ltd. (NASDAQ: GIGM), ICON (NASDAQ: ICLR), Mettler-Toledo International, Inc. (NYSE: MTD) and Navios Maritime Holdings Inc. (NYSE: NM). View the entire list of stocks for the Recent Price Strength Profit Track at http://at.zacks.com/?id=1863.

Here are details about four companies currently identified by the Recent Price Strength Profit Track:

GigaMedia Ltd. (NASDAQ: GIGM), a major provider of online entertainment software and services, is a stone's throw from its 52-week high. The Zacks #2 Rank company has also surged by almost 32% over the past four weeks. Such factors easily pass the parameters of the Recent Price Strength profit track, suggesting strong momentum for GIGM. The company recently got a boost after a major brokerage firm initiated coverage with an "outperform" rating. Previously, GigaMedia announced solid second-quarter results, including revenue growth of 88%, and stated that it expects stronger growth in the second half with excellent momentum into 2008.

Earlier this week, ICON (NASDAQ: ICLR) reported third-quarter revenue growth of 38.3% to $166.9 million from $120.7 million year over year. The company also announced that earnings per share improved from the previous year while also eclipsing the consensus. Given the strong results, ICON raised its revenue and EPS guidance for 2007. The performance helped this Zacks #1 Rank company surpass its 52-week high and validate its position in this profit track. With its share price rising over the past 12- and four-week periods, the company appears to have a solid and upward trend in place. ICON provides outsourced development services to the pharmaceutical, biotechnology and medical device industries.

Mettler-Toledo International, Inc. (NYSE: MTD) is a leading global supplier of precision instruments and services. This Zacks #2 Rank company fulfills this profit track with a current price that hovers around its 52-week high. A price change of more than 7.5% in the past four weeks further supports its encouraging trend. MTD will report its third-quarter results on Nov 1. For its second quarter, the company announced earnings per share of $1.07, which beat the consensus by almost 5% while easily surpassing the year-ago result. Sales advanced to $430.5 million from $389.2 million. Mettler-Toledo is confident in its growth prospects moving forward and raised its 2007 EPS outlook.

Navios Maritime Holdings Inc. (NYSE: NM) is a seaborne shipping company that transports a wide range of drybulk commodities, including iron ore, coal and grain. This puts the company in one of the market's hottest industries, as underscored by its membership in the Recent Price Strength profit track. Navios' share price is a short jump from its 52-week high. Furthermore, over the past four weeks, this Zacks #2 Rank's share price has gained more than 24%, which is evidence of a favorable price trend. Given such factors, Navios Maritime appears to enjoy solid momentum moving forward as it capitalizes on strong industry momentum.

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Quote from: Kublakhan on October 25, 2007, 10:20:39 AM
GIGM started at BUY from Citi w/ $28 price target

Thanks for the information Kublakhan, so now we have Bear Stearns calling for $27 and Citigroup for $28. These price targets will probably act as a magnet and GIGM will probably achieve them in less than six months time.

QuoteGigaMedia Ltd. (NASDAQ: GIGM), a major provider of online entertainment software and services, is a stone's throw from its 52-week high. The Zacks #2 Rank company has also surged by almost 32% over the past four weeks. Such factors easily pass the parameters of the Recent Price Strength profit track, suggesting strong momentum for GIGM. The company recently got a boost after a major brokerage firm initiated coverage with an "outperform" rating. Previously, GigaMedia announced solid second-quarter results, including revenue growth of 88%, and stated that it expects stronger growth in the second half with excellent momentum into 2008.

Nothing new here, perhaps just some more visibility.

I'll continue holding GIGM for the long term.

Bear Stearns is calling for $27 and CitiGroup for $28, this for October 2008. At the midpoint of these expectations the 12 month return would be roughly 25% and I could live with that ... but I'm more optimistic than that.

I'll continue holding GIGM for the long term.

GIGM closed at a new seven year high today (the all time high was $91 back in 2000).

The company's market cap is now $1.24 B, but I remain confident that it will be $2 B ($38 a share) in the not so distant future.

Lets make quick some comparisons with other online gaming companies, for example, SNDA and NTES. SNDA is a $2.86 B market cap with 2008 estimated revenues of $375 M. NTES is a $2.47 B company with 2008 estimated revenues of $318 M. And GIGM is $1.24 B market cap with 2008 revenues of $240 M.

So, SNDA's sales multiple is 7.63, NTES is 7.77 and GIGM's Price to Sales Ratio is 5.16.

Considering this metric GIGM is still undervalued and needs to rise 50% to get in line with its peers ... and GIGM's growth potential is much higher, in my view. GIGM is also more diversified and more global than SNDA and NTES.

I'll just let the profits run on GIGM, holding for the long term.

There wasn't any new information out for GIGM. The fair value for these shares, given by my valuation model, is $49.32, so I'll keep holding GIGM for the long term.

It appears GIGM and other Chinese online gaming companies (even though GIGM isn't just that) got a boost yesterday from Giant Interactive (GA) market debut yesterday:

A 'Giant' gaming IPO from China

This IPO isn't "Giant" on name only, since, according to my calculations using the SEC IPO prospect, GA's market cap is currently $4.8 B, making it the largest Chinese online gaming company. It looks like it's trading at 36 times earnings.

GIGM is still just a $1.3 B market cap company and I see it going to $2 B in 12 months time.

I'll continue holding GIGM for the long term.

GIGM will report 3rd quarter earnings on November 14th:

• GigaMedia to Report Third-Quarter 2007 Financial Results on November 14
PR Newswire (Wed, Oct 31)

One of GIGM's beauties is that it is mostly independent of the economic cycle. If anything people gamble even more at times of economic stress and anxiety.

Estimates for the 3rd quarter are conservative, due to seasonality, I think GIGM will beat the following expectations ...



... because GIGM already grew on a sequential basis in the 2nd quarter, which was also considered to be soft from a seasonal standpoint.

I'll keep holding GIGM for the long term.

GIGM's 2nd quarter was also seasonally weak and look at the company's performance on a sequential basis:



Revenue grew 11% and EPS grew 17% from Q1 2007. Analysts are expecting a decline in EPS in Q3 ...



... which is a nonsense to me, I'm pretty sure the company will easily surpass these estimates. By how much is the question.

Beyond the quarterly analysis we need to think of the long term, mainly the potential of the company's pipeline of new products and services, like the Japanese suite of games, Mahjong for $ and online game Hellgate: London.

Never forget that there are companies outthere with just one online game which are worth more than GIGM, which is a very diversified company and will also enter the Chinese online gaming market with two games, Hellgate: London and Holic.

I'll keep holding GIGM for the long term.

I hope those selling this morning are just nervous rather than knowlegible.

GigaMedia (GIGM) NewsBite - GigaMedia Slips on Lionbridge Outlook
Tuesday , November 06, 2007 02:56ET

Nov 06, 2007 (Fresh Brewed Media via COMTEX) -- GigaMedia Ltd. (GIGM) opened at 24.00. So far today, the stock has hit a low of 21.23 and a high of 24.10. GIGM is now trading at 22.08, down 1.79 (-7.46%). The stock hit its 52 week high of 25.42 in November and set its 52 week low of 8.66 in December. GIGM has been moving upwards for most of the past year. Shares of internet software providers have been falling today after Lionbridge Technologies Inc. (LIOX) posted disappointing third-quarter sales and issued revenue outlook below analysts' expectations. Technical indicators for the stock are bullish and steady. If you're looking for a hedged trade on this stock, consider a December bear-call credit spread above the $30 level. GIGM stock could rise up to 35.9% before expiration and this position would still be profitable.

Anyone find the reason for the 10% drop today?

Cheers,

fyi:
GigaMedia (GIGM) NewsBite - GigaMedia Slips on Lionbridge Outlook
Tuesday , November 06, 2007 02:56ET

Nov 06, 2007 (Fresh Brewed Media via COMTEX) -- GigaMedia Ltd. (GIGM) opened at 24.00. So far today, the stock has hit a low of 21.23 and a high of 24.10. GIGM is now trading at 22.08, down 1.79 (-7.46%). The stock hit its 52 week high of 25.42 in November and set its 52 week low of 8.66 in December. GIGM has been moving upwards for most of the past year. Shares of internet software providers have been falling today after Lionbridge Technologies Inc. (LIOX) posted disappointing third-quarter sales and issued revenue outlook below analysts' expectations. Technical indicators for the stock are bullish and steady. If you're looking for a hedged trade on this stock, consider a December bear-call credit spread above the $30 level. GIGM stock could rise up to 35.9% before expiration and this position would still be profitable.