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5-Star Stocks Poised to Pop: Actions Semi

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Chinese chip maker Actions Semiconductor (Nasdaq: ACTS  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Actions Semi's business and see what CAPS investors are saying about the stock right now.

Actions Semi facts

Headquarters (founded) Zhuhai, China (2001)
Market Cap $183.2 million
Industry Semiconductors
Trailing-12-Month Revenue $34.8 million
Management CEO Hsuan-Wen Chen (since 2009)
CFO Pei-Fen Chou (since 2007)
Return on Capital (average, past 3 years) 0.6%
Cash/Debt $212.7 million / $0
Competitors Texas Instruments (NYSE: TXN  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 96.5% of the 542 members who have rated Actions Semi believe the stock will outperform the S&P 500 going forward. These bulls include All-Star goldminingXpert, who is ranked in the top 5% of our community, and Stocktowin.

A few months ago, goldminingXpert touched on Actions Semi's almost unbelievably solid balance sheet: "Unless they are lying about their cash position, this stock goes higher."

Actions Semi's growth prospects and rock-solid financial position continue to support its five-star CAPS status. Over the next five years, Actions Semi is even expected to grow its bottom line at a substantially faster pace (25% per annum) than listed rival Texas Instruments (10%), as well big-cap chip plays such as Intel (Nasdaq: INTC  ) (12.8%), AMD (NYSE: AMD  ) (11.3%), and NVIDIA (Nasdaq: NVDA  ) (14.3%).

CAPS member Stocktowin even tapped Actions Semi as the perfect takeover target for one of those gorillas:

Valuation wise, current price is way too cheap under any valuation model. If the investors community keeps on refusing to place it at least close to book value, this company will be bought by its competitors for $4 soon. ...

Still thinking that it won't happen on [Actions Semi]? I've heard that kind of myopic thinking on tons of past buyouts before they actually happen. As I said, with tech giants in the U.S. and Asia sitting on hoard of cash pile and [Actions Semi] ... in the 2nd biggest economy, of which consumption and capital investment are growing at unprecedented speed, I'll bet my house with these doubters any time.

What do you think about Actions Semi, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Intel is a Motley Fool Inside Value pick, and the Fool owns shares of and has bought calls on it. Motley Fool Options has recommended buying calls on Intel. NVIDIA is a Stock Advisor selection. The Fool owns shares of Texas Instruments. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 13, 2010, at 7:47 PM, gsurmvudjk wrote:

    Brian, I don't get it...are you saying this is a good stock to buy?

    Seems like their sales have gone from $116.63 M in 2007... to $95.3M in 2008 ...to $44.14 M in 2009.

    And seems like Revenue has gone from $13.4 M in Q3 of 2009 ...to $9.7M in Q2 of 2010,,, to $9.3M in Q3 of 2010.

    PR Newswire Nov. 2 states:

    Q3 2010 shows net income of $1.9 M, but that's after adjustments totaling +$2.4M (foreign exchange gain, reversal of overstated compensation, and acquisition of equity interest in Mavrix. In other words, a loss of $.5M in operating income, no? And ending cash of $54.0M plus $183.4M worth of "securities".

    Am I missing something, or is this a really bad stock? I started to buy some of it because of your article, but when I looked a little deeper I decided to pass. Was I mistaken?

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