3SOF

Quote from: Se7en on May 15, 2007, 03:55:14 PM
Bought some SILC today @ $20.90

Good move Se7en

SILC left a gap open and closed it today, since yesterday's news wasn't a positive surprise, because the CEO already said over the latest conference call that he expects about two new design wins per quarter.

Anyway, the news shows SILC continues on its growth path, and therefore making a simple extrapolation of Q1 2007 EPS number to the full year (multiplying $0.22 by 4 to get to a full year EPS of $0.88) seems wrong.

Everything is on track for the company to deliver on my long term estimates, so I'll keep holding SILC. Up or down 10% over the short term is just unpredictable noise, you don't want to try to catch all fluctuations, or you'll surely miss the main move, the only one that can bring you money over the long term.

SILC's fundamentals continue to improve, as we've seen with the latest news ...

• Giant Telecom Equipment Manufacturer Chooses Silicom Multi-Port Adapters for Its Security Appliances
Business Wire (Mon, May 14)

... but there's some more work to do on the technical side before the stock starts a bull run to new all time highs. Probably this correction won't end until there's a kiss on the 50 days SMA, like it happened in March. Today that moving average stands at $19.22.

I'll keep holding SILC for the long term.

I guess almost all weak hands are out of SILC now, and the stock is getting ready to start a third bull leg that will take it above $30. The more I study stocks the more I believe SILC is special, it's not everyday that you find a company consistently growing revenues by 84% with a 20% plus net profit margin.

I'll keep on holding SILC.

Nothing new on SILC today, it was a very low volume day with just 44,100 shares changing hands. The 50 days SMA is coming up at $19.54 and it will probably provide the support needed to sustain the current correction phase.

Sometime this year we'll get another big news or another very positive quarter that will take SILC above $30. That has been the long term trend, we just have to be patient. I'll continue holding SILC.

SILC seems to be waiting for the 50 days SMA before pushing back up again. For today the 50 days SMA will be standing at $19.68. I'll keep holding SILC.

SILC bounced 4.5% today, responding to the proximity of the 50 days SMA support. If recent fundamental trends continue (and I don't see a reason why they should change) SILC will be a $92.35 stock about three years from now. I'll continue holding SILC.

I'm also starting to get interested in another stock of the Israeli RAD group, which is RDCM. I know Q1 was very ugly, but the balance sheet remains strong with about $9.2 M in cash. The company is now just a $22 M market cap with 2007 expected revenue of $22 M. I think it deserves a deeper study, perhaps tomorrow.

SILC has been building a base around the 50% Fibonacci retracement level as it waits for the 50 days SMA support, like it happened in March. I expect the stock to start a new bull leg towards all time highs when this consolidation phase is over. The catalyst can be a new design win or another strong quarterly result. Fundamentals remain very attractive, I'll keep holding SILC.

Finally SILC stands at the 50 days SMA. Technically it should rebound from this level, like it did in March.

There weren't any new fundamental developments on SILC today. Technically the stock closed just a bit below the 50 days SMA, like it happened last March. I'm not saying that the medium term future will be exactly the same, but I do want to say that the stock is fundamentally attractive at these levels and technically it should start rising anytime soon.

I'll keep holding SILC.

SILC bounced from the 50 days SMA support, as expected. Now it just needs to make a bullish breakout above the short term descending trendline on the chart below (Tuesday that line will be standing at $20.64, so a 1% rise will do the trick) to turn bullish, not only over the medium and long term time frames, but over the short term too.

Fundamentally I continue to see 2% dilution, 84% revenue CAGR, 25% net profit margin and a 26.37 earnings multiple. If these estimates are met SILC will be a $92.35 stock in late 2009.

Curiously enough, one of SILC's competitor's (which I believe is also a client), RVBD, continues to climb, even though it is still losing money. RVBD trades at 21 times revenues, imagine if SILC were to trade at the same revenue multiple, it would be a $59 stock.

I believe it will be a multiple expansion that will lead SILC towards $30, even if we don't get further positive developments between now and the 2nd quarter results, which will be out just in August.

The WAN optimization market and the "work from everywhere" trend is just starting and SILC is at the center stage of it.

I'll continue holding SILC for the long term.

Any idea whats the reason behind the 2bucks pop today?? Not complaining at all..but just trying to make some sense of it..

Nice that the move is backed up with some good volume, MACD is heading to positive territory and a bullish cross is near! 

Quote from: nicknite20 on May 29, 2007, 12:03:43 PM
Any idea whats the reason behind the 2bucks pop today?? Not complaining at all..but just trying to make some sense of it..

I guess you have two forces pushing SILC higher today and hopefully beyond today:

1 - There's a bullish breakout going on, after testing the 50 days SMA

2 - Multiple expansion will drive SILC higher. SILC doesn't need new and positive fundamental developments to reach $30 in my opinion.

Without any news out (at least not that I know of), SILC rallied 13.73% today on volume above average of roughly 300,000 shares.

As I've been writing, the rapid growth of the WAN optimization industry, coupled with the "work from anywhere" global emerging trend is making investors attach a very high multiple to stocks operating in the sector. For example, RVBD trades at 21 times revenues and it is already a $2.7 B market cap company, even though it made just a tiny $3.26 M profit in Q1 2007, after an history of heavy losses.

So, it wouldn't surprise me at all if SILC were to surpass $30, even without any new fundamental improvement, just due to an earnings multiple expansion. My take is SILC will earn about $1 per share in 2007, so it is trading at about 23 times earnings. It wouldn't shock me to see it trading at 40 times earnings instead, because of its growth rate and fat net profit margin.

But, let's enjoy the moment, nice bullish breakout

SILC filed its form 20-F with the SEC today. I read the first 5 pages, so far, so good. I'll read 5 pages per trading day going forward, even though I don't think I'll find anything new or surprising, it helps to understand the business (especially risks to forecasts) better.

Technically we've had a small pullback after yesterday's 13% advance. I'll continue holding SILC.