GIGM - Sector: Technology---Industry: Multimedia & Graphics Software

[David Randolph]

Are you sure he is short?  His last post I saw on 10/7 was neutral to positive, here is an excerpt:

You're right Tokyopua, now that I've read the entire post with more attention (opening my mind to the short term technical noise ) I see that he isn't short, he's neutral, because:

«But, my "shorting breakouts" days are long since over. That's a HUGE "no-no" for me, even if the trade would have ended up working out. The majority of bullish breakouts in bullish stocks are true breakouts, and I won't even consider shorting them.»

I agree with him, not a good idea to sell bullish breakouts short.

As I've studied and experienced more about the stock market, I'm moving further and further away from technical analysis. As Melf Elf post clearly exemplifies, technical indications change too often, and they're often wrong too. I am getting to the point of believing they don't work at all ... and it makes sense, if we consider stocks represent a business. The way the business goes doesn't have any regard for trendlines or any other technical indicators derived from the stock price. Also, if we consider something like "fair reward for your work", I think drawing some lines on a chart or looking at the open-high-low-close-volume relationship isn't properly working hard for your money ... I mean, my 8 year old kid (if I had one of that age), could do that job. Does anyone really believes outstanding long term returns can come out of this activity? I don't think so, I think it is an illusion.

Going back to GIGM ... as one can read on this thread, I expect positive news between now and the end of the year and the stock to close 2007 above $20. I'll continue holding GIGM for the long term.

[la-onda]

also for the free board 
GigaMedia initiated with "outperform" - update

Thursday, October 11, 2007 1:53:14 PM ET
Bear Stearns

NEW YORK, October 11 (newratings.com) - Analyst James Rhee of Bear Stearns initiates coverage of GigaMedia Ltd (ticker: GIGM) with an "outperform" rating.
The target price is set to $27.

In a research note published this morning, the analyst mentions that the company has a strong presence in the growing real-money gaming software and online games industries. GigaMedia's real-money gaming software and online games businesses are expected to generate revenue CAGRs of 26% and 83%, respectively, in 2007-2010, the analyst says. The company has an impressive investment track record and has been prudently utilizing proceeds from the disposal of low-return assets and operations to create shareholder value, Bear Stearns adds.

[la-onda]

awesome, just awesome

GigaMedia initiated with "outperform" - update

Thursday, October 11, 2007 1:53:14 PM ET
Bear Stearns

NEW YORK, October 11 (newratings.com) - Analyst James Rhee of Bear Stearns initiates coverage of GigaMedia Ltd (ticker: GIGM) with an "outperform" rating.
The target price is set to $27.

In a research note published this morning, the analyst mentions that the company has a strong presence in the growing real-money gaming software and online games industries. GigaMedia's real-money gaming software and online games businesses are expected to generate revenue CAGRs of 26% and 83%, respectively, in 2007-2010, the analyst says. The company has an impressive investment track record and has been prudently utilizing proceeds from the disposal of low-return assets and operations to create shareholder value, Bear Stearns adds.

[nicknite20]

FINALLY !!!>.After attending 3 CC..they get their act together.

[David Randolph]

Wow, GIGM closed above $20

La-onda gave us the explanation for the 13.9% rise on GIGM while the Nasdaq went down 1.4%:

«NEW YORK, October 11 (newratings.com) - Analyst James Rhee of Bear Stearns initiates coverage of GigaMedia Ltd (ticker: GIGM) with an "outperform" rating.
The target price is set to $27.

In a research note published this morning, the analyst mentions that the company has a strong presence in the growing real-money gaming software and online games industries. GigaMedia's real-money gaming software and online games businesses are expected to generate revenue CAGRs of 26% and 83%, respectively, in 2007-2010, the analyst says. The company has an impressive investment track record and has been prudently utilizing proceeds from the disposal of low-return assets and operations to create shareholder value, Bear Stearns adds.»

Here are more notes from this Bear Sterns analyst:

«Rhee predicted that the company's stock could benefit from regulatory easing in Europe and the free-trade policy among European Union states.»

«The brokerage, which set a 2008 price target of $27 on the company, said risks to its target include prohibitions against real-money gaming and competition in Asia's online games market. »

Anyway, I think the "juice" of this analysis is in the following part:

«GigaMedia's real-money gaming software and online games businesses are expected to generate revenue CAGRs of 26% and 83%, respectively, in 2007-2010, the analyst says.»

Let's study this in more detail. Gaming Software business had 2006 revenue of $55 M and the Online Games business had 2006 revenue of $18.7 M. If we make the calculus we get to $109 M for Gaming Software and $115 M for Online Games business in 2010, that is, $224 M in consolidated revenue.

In my valuation model I'm expecting 50% revenue CAGR for GIGM as a whole ...



... which gives me $318 M revenue in 2009, not 2010. So I'm a lot more optimistic than the Bear Sterns analyst. I don't know why he expects such a slowdown in the Gaming Software business unit, since he expects just 26% revenue CAGR, even though the recent growth rate has been quite superior:



150% revenue growth in Q2 2007 when compared with Q2 2006, which is a lot more than 26%. I think the analyst is being too pessimistic when he expects this type of slowdown in growth.

GIGM is also beating my 50% revenue CAGR estimate for the consolidated business, because I have 50% and revenue growth in Q2 2007 from Q2 2006 was 88%:

«Consolidated revenues up 88 percent year-over-year to $40.1 million; up 11 percent sequentially over Q1 of 2007.»

So, in my view, GIGM's fundamental trends are much more powerful than the numbers put out by the Bear Sterns analyst. And, if the market's response to his analysis was a 14% advance day, wait until they see the real numbers and their trend

My valuation model says GIGM is currently worth $49.32 a share, I'll continue holding GIGM for the long term.

[Terliso]

Applause David, great work here..

[la-onda]

here are the reason why we are all invested in GIGM 

Full BS report is attached, please download

cheers from Detroit Rock City 
O.

[David Randolph]

Applause David, great work here..

Thanks Terliso, patience is really paying off on GIGM

here are the reason why we are all invested in GIGM 

Full BS report is attached, please download

cheers from Detroit Rock City 
O.

Great information La-onda, applaud

I see Bear Stearns places a lot of confidence in HellGate:London, but it almost ccompletely disregards the Japanese suite of games ... and it doesn't consider MahJong for money much. All in all, I think GIGM can and will probably do much better than Bear Stearns' estimates. That $27 price target for the end of 2008 may very well be reached in the first quarter.

I'll continue holding GIGM for the long term.

[BigSully1]

Yes great info on GIGM as usual La-onda. I think GIGM might go on the IBD 100 soon, not that it needs it though, as it's beginninhg to garner enough attention on it's own. IBD currently has it on a list of 10 fast growers, might take another ER to get on the 100. IBD rates it as best in group in 3 out of 4 categories, including overall.

[David Randolph]

Yes great info on GIGM as usual La-onda. I think GIGM might go on the IBD 100 soon, not that it needs it though, as it's beginninhg to garner enough attention on it's own. IBD currently has it on a list of 10 fast growers, might take another ER to get on the 100. IBD rates it as best in group in 3 out of 4 categories, including overall.

Thanks for the info BigSully1

As time goes by, and GIGM goes up, those phases, 1 and 2 on the chart below will lose importance. I guess that six months down the road everybody will look at them as "short term technical noise" or "consolidation phases". This will be good to remember when something similar happens in this or another stock ... the chart said sell but the fundamentals seemed to be very attractive.

If this case happens to you again, be strong and trust your fundamental analysis, as you'll probably be rewarded like no short term trader is. Short term traders think they are doing well, but after 20 or 30 years of thousands of trades they see that the overall result is that they barely beat commission costs and had a very stressful life while doing it. It is a lot more fun to study the businesses and invest in them than trying to guess what the next day will bring. I talk from personal experience.

I suppose GIGM won't continue rising in a straight line, but it doesn't cross my mind to sell it to try grabbing it lower, that would only bring anxiety and I could lose my position. In my view GIGM is worth a lot more than other online gaming/gambling companies outhere which are valued at $2 B plus. And GIGM is still just a $1.1 B market cap company.

I'll continue holding GIGM for the long term.   

[David Randolph]

I was expecting a press release about the Japanese suite of games, Mahjong for $ or Hellgate: London, but GIGM's management doesn't seem to be the type of trying to put the share price as high as they can over the short term.

They don't seem interested in an artificial advance, so they usually just provide very relevant information, and usually just at the earnings release and conference call.

The next conference call will probably happen in late November. I'll continue holding GIGM for the long term.

[setravis]

Speculation.......
Above 13-day MA...with next earnings report November 2007.

UPDATE 1-RESEARCH ALERT-Bear starts GigaMedia with outperform...

52wk Range: 8.66 - 21.62
Volume: 730,477
Avg Vol (3m): 1,263,690
Market Cap: 1.13B
P/E (ttm): 39.93
EPS (ttm): 0.536

Technicals
Last Price Quote is:
13.50%above 13-day MA
34.16%above 50-day MA
RS Rating: 2 

Fundamentals
Key Data:
Market Cap (M): $1,075.21 
P/E Ratio: 34.87 
PEG Ratio: 0.8275 
Next Earnings: 11/08/2007
Last Analyst Rating: Outperform

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Also read this, it is also posted on the GIGA Thread.......

The Giga Is Up.......
This has to be the most hotly anticipated earnings call since the Internet bubble.
Giga-tronics (GIGA)
Tiny producer of test and measurement equipment for the wireless-communications industry, announced late last Thursday it would release second-quarter earnings Oct. 30.

The stock surged 46% last Friday to a two-year high of $3.76. Volume was 6.7 million shares for a stock that typically trades less than 10,000 shares a day. On Monday, the stock hit an intraday high of $4.27, 69% higher than last Thursday, before closing down 15 cents, or 4% to $3.61 on volume of 1.9 million shares.

"On a normal basis, we don't give out any forward-looking information and nothing new has transpired," says Pat Lawlor, Giga-tronics chief financial officer. "I'm glad to see the stock go up, but there's no reason I know of."

It's possible that the San Ramon, Calif., company has done well, but not this well. The word on Wall Street is that day traders and message-board junkies are confused and have mixed up their tickers.

It just so happens a similar-sounding company, GigaMedia (GIGM)
received a big boost last Thursday when Bear Stearns began coverage of the stock with an outperform rating. On Thursday, GigaMedia's stock jumped 14% to $20.90 on volume of 2 million shares. Its average daily volume appears to be around 500,000 shares.

"It makes sense that it was a mix-up in the ticker," says Lon Juricic, editor of StreetInsider.com, a financial news Web site. "When you have a micro-cap stock that surges on no news, and the day before, a company with a similar name gets a nice boost from Bear Stearns, you can put two and two together."

Giga-tronics is on a bit of an upswing. The company says 70% of its business is government oriented. It sells products that airplane maker Boeing (BA) puts into its planes for the U.S. military.

For the fiscal year ended March 31, it posted a net loss of $1.9 million, or 39 cents a share, double the loss of $988,000, or 20 cents a share, the previous fiscal year. Annual revenue fell 12% to $18.0 million year over year. For its most recent quarter ended June 30, the company returned to profitability, earning $92,000, or 2 cents a share, reversing the year-earlier loss of $1.0 million, or 21 cents a share. Revenue jumped 37% to $4.6 million.

Surprisingly, the day after it announced a real profit, on July 31, the stock gained 20% on volume of just 129,620 shares. Not bad, but not the frenzy of Friday.

CFO Lawlor says the company's trends are positive after restructuring the business over the past year, which included reducing the staff by 20% and closing some facilities.

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[setravis]

From my post on the Stock Picking Board.

Speculation.......
Above 13-day MA...with next earnings report November 2007.

UPDATE 1-RESEARCH ALERT-Bear starts GigaMedia with outperform...

52wk Range: 8.66 - 21.62
Volume: 730,477
Avg Vol (3m): 1,263,690
Market Cap: 1.13B
P/E (ttm): 39.93
EPS (ttm): 0.536

Technicals
Last Price Quote is:
13.50%above 13-day MA
34.16%above 50-day MA
RS Rating: 2 

Fundamentals
Key Data:
Market Cap (M): $1,075.21 
P/E Ratio: 34.87 
PEG Ratio: 0.8275 
Next Earnings: 11/08/2007
Last Analyst Rating: Outperform

<><><><><><><><><><><><><><><><><><><><><><><><><><><><>

Also read this, it is also posted on the GIGA Thread.......

The Giga Is Up.......
This has to be the most hotly anticipated earnings call since the Internet bubble.
Giga-tronics (GIGA)
Tiny producer of test and measurement equipment for the wireless-communications industry, announced late last Thursday it would release second-quarter earnings Oct. 30.

The stock surged 46% last Friday to a two-year high of $3.76. Volume was 6.7 million shares for a stock that typically trades less than 10,000 shares a day. On Monday, the stock hit an intraday high of $4.27, 69% higher than last Thursday, before closing down 15 cents, or 4% to $3.61 on volume of 1.9 million shares.

"On a normal basis, we don't give out any forward-looking information and nothing new has transpired," says Pat Lawlor, Giga-tronics chief financial officer. "I'm glad to see the stock go up, but there's no reason I know of."

It's possible that the San Ramon, Calif., company has done well, but not this well. The word on Wall Street is that day traders and message-board junkies are confused and have mixed up their tickers.

It just so happens a similar-sounding company, GigaMedia (GIGM)
received a big boost last Thursday when Bear Stearns began coverage of the stock with an outperform rating. On Thursday, GigaMedia's stock jumped 14% to $20.90 on volume of 2 million shares. Its average daily volume appears to be around 500,000 shares.

"It makes sense that it was a mix-up in the ticker," says Lon Juricic, editor of StreetInsider.com, a financial news Web site. "When you have a micro-cap stock that surges on no news, and the day before, a company with a similar name gets a nice boost from Bear Stearns, you can put two and two together."

Giga-tronics is on a bit of an upswing. The company says 70% of its business is government oriented. It sells products that airplane maker Boeing (BA) puts into its planes for the U.S. military.

For the fiscal year ended March 31, it posted a net loss of $1.9 million, or 39 cents a share, double the loss of $988,000, or 20 cents a share, the previous fiscal year. Annual revenue fell 12% to $18.0 million year over year. For its most recent quarter ended June 30, the company returned to profitability, earning $92,000, or 2 cents a share, reversing the year-earlier loss of $1.0 million, or 21 cents a share. Revenue jumped 37% to $4.6 million.

Surprisingly, the day after it announced a real profit, on July 31, the stock gained 20% on volume of just 129,620 shares. Not bad, but not the frenzy of Friday.

CFO Lawlor says the company's trends are positive after restructuring the business over the past year, which included reducing the staff by 20% and closing some facilities.

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[setravis]

The "GIGM" Threads in Previous 3SOF Picks
Have been merged.
Got the go ahead to do so from Ramsburg.
I will be working here on this board to merge other threads also.


Good trading to all !   

Regards,
Your fellow trader @3SOF
setravis     

[David Randolph]

After being up so much, GIGM went up some more. Phases 1 and 2 on the chart below are starting to look small. In 12 months time almost nobody will remember them anymore. But I will.
I'll remember it for the next time I see misleading information taking a stock sharply down.

I'll just let the profits run on GIGM, $2 B market cap is a sure thing to me (currently it is $1.2 B).