SIRF - SiRF Technology Holdings

Description

A semiconductor supplier of Global Positioning System, based location technology solutions designed to provide location awareness capabilities in mobile consumer and commercial systems.

Bull Argument

SiRF Technology Holdings was way oversold as it missed earnings expectations with less-than-expected sales at Garmin and Mio.  Amidst all the recession turmoil the market way overreacted and oversold SIRF.  After getting creamed, SIRF now trades at 9.2 times estimated 2008 earnings of 55 cents a share and at 6.5 times estimated earnings of 77 cents a share for 2009.  Any way you look at it (including buyout scenarios) the stock is now dirt cheap.

Bear Argument

The earnings miss could be signalling a larger trend - namely that the GPS market was way oversold.  SIRF's net margins are now negative and P/S (Price to Sales) is on par with the industry average.  They incur enormous R&D costs and have yet to see positive operating cash flow.  This paints a picture of a growth company with poor financials, and competition that is knocking at the door.  Look out below!

Reference - RealMoney by TheStreet.com