Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Himax Technologies (NASDAQ: HIMX ) have been advancing throughout the trading day, and are now perched atop gains of 12%, after Oppenheimer analysts Andrew Uerkwitz and Martin Yang initiated coverage with a buy rating, making some strongly supportive comments in the process.
So what: According to a note obtained by Barron's this morning, Himax is "well positioned to supply in high volume the growing need for complex display technologies used in smartphones, tablets, TVs, and the burgeoning market of wearable computing devices." While the display-tech market has seen a number of high-potential stocks rising of late, and is packed with competition, Himax's increasingly diverse product portfolio looks appealing to the Oppenheimer analysts. They've slapped a $9 price target on shares, which represents another 20% upside from here.
Now what: Himax is surprisingly inexpensive for such a hot stock -- its P/E is less than 25 even after today's pop, and its forward P/E is only half that. The company could be at the beginning of a great run, but it's worth understanding why, rather than buying into hot rumors. Speculation lately has involved Himax supplying Google with the materials for its Glass headwear's tiny display. There's been no confirmation of that (to my knowledge), but the company is clearly finding a lot of customers and earning respectable profits somewhere. Dig a little deeper to make sure that this company is truly the hidden gem indicated by its recent heady price growth.
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