Charles Lannon
ARM Holdings PLC
ARMH-OTC
COMMENT
Jun 11, 2014
A great company and a hero of the UK tech industry. They make power chips, largely for mobile devices, and are a great competitor for Intel (INTC-Q). Stock is off because of the weight of expectation. When growth stocks start to decelerate they always suffer because there is a transition in the shareholder base that goes from the hedge fund managers to growth managers to “growth at a reasonable price” managers. Stock has a long, long way to go before the value investors are going to be interested.
Just reported its first quarter post-IPO. Revenue beat strongly, up 28% YOY, an earnings beat and free cash flow way up, but the forecast was conservative. The market sold.
It formed a base last month and is in the early stage of a rally. You have to have an exit strategy so this one would be at $50. It has lots of potential.
The markets are frothy. This has jumped 30% in one week. Sure, they delivered a terrific quarter, but give me a break. Those buying ARM now at these levels have no discipline. The bulls are running way too hard, even though it's a good company.
Probably has 2-3 years of steady growth and demand, along with hiccups and ripples. Likes it. A UK-way of playing NVDA with chip design. Should do well going forward, at least over the next 2-3 years.
Good outlook for the business, but not investing at this time. Valuation is high, so would wait before investing. Better options for investors in the markets.
A great company and a hero of the UK tech industry. They make power chips, largely for mobile devices, and are a great competitor for Intel (INTC-Q). Stock is off because of the weight of expectation. When growth stocks start to decelerate they always suffer because there is a transition in the shareholder base that goes from the hedge fund managers to growth managers to “growth at a reasonable price” managers. Stock has a long, long way to go before the value investors are going to be interested.