Opinions
Benj Gallander
Rambus Inc.
RMBS-Q
DON'T BUY
Jan 12, 2009
Stock price when the opinion was issued
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This producer of DDR5 semi-conductor chips, increasingly used in AI servers, is a TOP PICK. It trades at 17x earnings and supports a robust 41% ROE. Cash reserves are growing, while shares are aggressively bought back and debt is retired. We recommend setting a stop-loss at $46, looking to achieve $80 -- upside potential over 40%. Yield 0%
(Analysts’ price target is $80.00)We reiterate this developer of computer chips used in AI development. It trades at 20x earnings and supports a robust 41% ROE. Next earnings will be reported on July 29. We recommend trailing up the stop (from $46) to $53, looking to achieve $79 -- upside potential of 20%. Yield 0%
(Analysts’ price target is $78.75)Our PAST TOP PICK with RMBS has triggered its stop at $53. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 12%, when combined with our previous recommendations.