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

[yukiii]

Getting close to the 200 MA, will double up in the low 12's if we get there.
Risk reward  looks good here. $1 down or $7 up.

[David Randolph]

I was thinking exctly the same... 

Strongly considering to step out of GIGM too today.

Amarens

Hi Amarens, I hope you didn't sell out GIGM. I think the case is different from SILC's, there's a lot more visibility here.

Anyway, the chart looks short term bearish.

Given the fundamental landscape that I've exposed on this thread, I strongly believe the best is yet to come on GIGM. My fundamental assessment doesn't rely just on past trends (as with SILC), but also on the knowing of new products and services that are about to be released, like Hellgate London, Mahjong for money, Japanese games, etc.

I'll keep holding GIGM.

[David Randolph]

Today I've learned from what I saw happening in VPHM that the market knows nothing about the future. Many times technical breakdowns are meaningless.

GIGM breaking down below $13.79 didn't meant anything for the long term fundamentals of the company or to how high it will be, say, 6 months from now.

Nice come back today. I'll keep holding GIGM with strong hands.

[Amarens]

Hi Amarens, I hope you didn't sell out GIGM. I think the case is different from SILC's, there's a lot more visibility here.

Hi David,

I did not get out. I am looking and thinking of a way that we do not go through these big losses. What short term fall is acceptable even though you have a long term view.

Interested to hear some opinions on that and succesrate. Anyone?

Amarens

[Houlahan]

I totally agree Amarens.
what short term fall is acceptable?
To me, SILC was not a clear cut "time to get out".
But David did see profits fall and to save them he felt he needed to get out.. But I did not have "profits" so I should have asked his opinion about staying in, but his opinion was the stock could go down more. If no one can guess the future then why not continue to have strong hands in a good company? His valuation model is for 3 YEARS. So long term is for.......how long??

These small cap companies make it difficult to hold long term. If we are dealing with large cap, long term is much easier. Most of the time, large cap companies are more stable. I guess that is the risk we take.

I have weak hands for long term hold after that stint. If you have profits, take the profit!
I would love to see David do quick trades and other trades for long term.

Just my small opinion. I am sure David will be here to answer your question and growl over my thought of "quick" trades. hehe

[bananajo]

Hello Everybody
Im new premium member.  GIGM 200 day MA is at 12.12. I hope it goes down a little bit more so I can buy... maybe next week 

GIGM had good Support at he 200 day MA in the past and support at the green line ...  probably good buying opportunity here. I hope so...
Very nice analysis from David.

Cheers, Engin

[la-onda]

GIGM: Shares Subject of Buyout Rumor
Monday , July 02, 2007 11:10ET

GigaMedia Limited (GIGM) shares, up 2.5%, are spiking on a leverage buyout rumor. There was no confirmation on the rumor.
http://www.knobias.com/story.htm?eid=3.1.e3ac32e0f37802207c93c1fe3714d17c3396bcb23a75c316ebae78efc4adf904

[David Randolph]

GIGM broke down key technical support areas, like the ascending trendline and the $13.79 horizontal support. But I've held the stock anyway, because I'm very confident about the fundamental landscape and that the company/stock will be worth a lot more in the future.

So, it is about time for the chart to turn bullish again. For that to happen GIGM needs to close above its short term descending trendline (tomorrow at $13.52) and back above the $13.79 level on close.

I expect this to happen before the next earnings release, which will probably be around mid August.

I'll keep on holding GIGM.

[David Randolph]

For that to happen GIGM needs to close above its short term descending trendline (tomorrow at $13.52) and back above the $13.79 level on close.

Not yet, as GIGM closed at $13.43. But since I have no doubts that Q2 2007 will present a positive surprise (many people think there will be a sequential decline in revenues due to seasonality), I expect the stock to climb back up $13.79 on close and challenge the highs at $16.42 sooner rather than later.

I'll keep holding GIGM.

[David Randolph]

As we can see on the chart below, GIGM is going through one of those boring periods (the fourth in roughly 18 months), where the stock makes us sick by not going anywhere or even going down. However, those weak periods didn't prevent GIGM from rising 300%, from $4 to $16, as fundamentals kept improving.

I expect the next 18 months to resemble the past 18 months and GIGM to be 300% higher than what it is now.

I'll patiently continue holding GIGM though all the ups and downs.

[David Randolph]

The market hasn't been treating GIGM well over the past few weeks, but I believe this is just due to the technicals that have turned short term bearish, not a long term fundamental issue.

I read parts of the 155 pages Form 20-F GIGM filed with the SEC in June 29th, 2007, and of course, like with any other company, there are several risks and opportunities.

It's really impossible to get to any conclusion on what to do by studying that entire report, so I'm going to turn to my valuation model:



According to my view of the fundamentals:

1) GIGM won't increase its share count by more than 3% a year over the next three years;
2) GIGM's revenues will rise at least 50% per year over the next three years;
3) The company's net profit margin will expand from 32.66% to 40%, like it happens with other online gaming companies;
4) The company will trade at the Internet Software & Services industry average valuation of 38 times earnings (37.05 in the valuation model because it is not updated)

And this means the stock is fundamentally very attractive. Until I believe this will be the future fundamental landscape I'll continue holding GIGM, despite the technical weakness, which happened in the past as we've seen, and didn't prevent GIGM from rising 300% over the last 18 months.

[David Randolph]

Nice 6.25% rally for GIGM, making a bullish breakout of its short term resistance level. Now the stock just needs to close above $13.79 (one cent above today's close) to show everybody willing to see that the bearish technical breakdown we've had, was false!

As I've written over several updates, I'm pretty much sure that the company will surprise the market on the upside when it reports its second quarter results, because many investors were led to believe there will be a sequential revenue decline when that's not the case, there will be just a lower rate of growth for its gaming software unit (which grew 50% sequentially in the previous quarter).

I'll keep on holding GIGM.

[David Randolph]

From yesterday's update:

Nice 6.25% rally for GIGM, making a bullish breakout of its short term resistance level. Now the stock just needs to close above $13.79 (one cent above today's close) to show everybody willing to see that the bearish technical breakdown we've had, was false!

Well, GIGM was able to close at $13.80, not bad, but not decisive from a technical standpoint either. Let's see what the next few days market action brings.

It would be nice to have GIGM near the highs when it reports 2nd quarter earnings, because that way it could make a powerful breakaway gap.

I'll continue holding GIGM.

[dmdray69]

Check out the new ad for Hellgate on youtube.
http://www.youtube.com/watch?v=JyBKtsfDq5k


Don't know about the dancing girls though........ouch!

[David Randolph]

Check out the new ad for Hellgate on youtube.
http://www.youtube.com/watch?v=JyBKtsfDq5k

Don't know about the dancing girls though........ouch!

Funny video dmdray

If we take into account what one single online game did for companies like NCTY (which is worth $1.45 B - roughly double the value of GIGM), we see that Hellgate: London has the potential to change GIGM's value completely.

Will that happen or not? Nobody knows, but right now GIGM is priced like Hellgate: London (and other of the company's initiatives) not even exists, therefore I consider the stock extremely attractive from a fundamental standpoint and I'll keep holding.