RF Micro Devices, Inc. (RFMD)

This is my AllStarPorfollio pick.


RFMD is a world leader in it's industry. This stock's all time high is roughly $85. I got in on this at $0.88 in January. Today the stock closed at $3.89. It has had a tremendous run-up and I've taken profits off the table many times, but I still think it has room to grow.

Since the dot-com bust this stock has traded in the $6-10 range while it was profitable. It has recently had a big slow-down in revenue with the poor economy and as the 3g boom run it's course. Now this year, possibly this earnings quarter, it will return to profitable. Which tells me we should get back to roughly $4-6 in short order.

Not only that, but since the downturn the company has had many cost cutting efforts improving their bottom line by roughly 20%. $6-8 here we come....

Also, the industry average for this industry's P/E is 60 with a five year average of 110. RFMD's FP/E is currently 20 with a PEG of 1.9. With a profitable company and a normalized could we get to a price of P/E $8-12? We're on our way....

And I know the PEG high. That is actually another reason I LIKE it. here's why...

RFMD has a 5- year EPS growth of 12%. Are you kidding me? 4g is knocking on our door and China still has a 3g revolution ahead. There is no way that projection will stay there, I'd double or triple it, making the PEG (hopefully 0.8-ish). I know it's a pipe-dream but with all that said, lets hope the stocks price could run up to $15-$20 with everything blowing in the right direction.

Oh, and they make amps for cell/smart-phones. They used to have 1 amp per cell phone. Now they use 4 amps in blackberry's, maybe even 6 in the 4/5g phones. So they're basically increasing their sales by 400% while trimming their bottom line by 20%. That's 500% to the $20 stock? Let's try to hit another all time high of $100!

Even if way I'm way off which I know I am, we should beat the market on this one.

Also, take a look at their RFiD dept. too. Another money maker that I don't even want to get started on.


Here's the RFMD blurb on Reuters:

RF Micro Devices, Inc. (RFMD) designs and manufactures radio frequency (RF) components and compound semiconductors. The Company’s products provide connectivity and support functionality in the cellular handset, wireless infrastructure, wireless local area network (WLAN), cable television/broadband and aerospace, and defense markets. RFMD manufactures gallium arsenide (GaAs)-based compound semiconductors. It accesses silicon, silicon germanium (SiGe) and other technologies through various foundries. The Company operates two synergistic product groups: cellular products group (CPG) and multi-market products group (MPG), both of which focus on RF components with emphasis on compound semiconductor technology. During the fiscal year ended March 28, 2009 (fiscal 2009), the Company’s CPG supplied handset original equipment manufacturers (OEMs) and original design manufacturers (ODMs). On April 26, 2008, the Company completed the acquisition of Universal Microwave Corporation.