"I use the term 'blowout' very sparingly," says tech expert Paul McWilliams in his Next Inning newsletter, which focuses solely on technology investing. "But even 'blowout' falls short of describing the quarter turned in by Sigma Designs (NASDAQ: SIGM)."

Indeed, the advisor notes, "I've likely described something as a 'blowout' less than ten times in the past five years. These 'waterfall' quarters don't happen often. As for Sigma, I didn't see this one coming and it's time to fix it.

"As background, SIGM makes media processor SoC (System on Chip) solutions for STB, BluRay and HD DVD, TV and various consumer devices that benefit from hooking into an IP video network.

"IPTV is an IP video network and, as a result of IPTV, we are putting these sorts of video networks in our homes. Roughly 77% of SIGM's sales last quarter were into IPTV STB applications.

"To give you an idea the magnitude of this recent surprise, SIGM's revenue for Q3 of this year (the October quarter) is closer to the forecasts most analysts had for Q4 next year than it was to what they were forecasting for the quarter just closed.

Continue reading Sigma Designs (SIGM): A 'blowout' quarter for media chips

Sigma Designs (SIGM): A 'blowout' quarter for media chips originally appeared on BloggingStocks on Mon, 03 Dec 2007 10:23:00 EST. Please see our terms for use of feeds.

"The momo crowd is at it again," says Toby Smith. The editor of ChangeWave Investing and panelist on Fox & Friends explains, "Momentum buying (or momo investing) strategies always tend to bid the price of the stock up as it goes higher."

But once the stock starts to sell off, he notes, "sell triggers are pulled and the momo players begin serious selling -- and that selling feeds on itself." But for those not caught up in the momentum craze, he adds, "For us, this just presents a great buying opportunity."

In his view, one such situation in which momentum-selling has created a buying opportunity is Sigma Designs (NASDAQ: SIGM), a maker of processors for markets such as high-def and Internet protocol TVs.

He notes that in Sigma's case, there were two primary factors that caused momo investors to sell. First, he notes, the company recently brought out 'limited' financial results for fiscal fourth-quarter and full-year 2007, ending February 3.

He explains, "SIGM's quarterly revenue was up 197% to $31.2 million, from $10.5 million in the year-ago period; for the year, revenue grew 174% to $91.2 million, from $33.3 million in fiscal 2006.

"But amidst the good news was word of a delayed announcement of further financial results pending the completion of a review of Sigma's stock-option-granting practices." That, he says, was "strike one."

Continue reading Momentum investors sell Sigma; Toby Smith buys

Momentum investors sell Sigma; Toby Smith buys originally appeared on BloggingStocks on Wed, 04 Apr 2007 13:40:00 EST. Please see our terms for use of feeds.