Why Lattice Semiconductor Stock Dropped, Then Recovered Today

Is Lattice Semiconductor's drop meaningful? Or just another movement?

Jul 25, 2014 at 7:26PM

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 Lattice Semiconductor Corporation (NASDAQ:LSCC) fell by as much as 18% Friday, then recovered to close down just 4% after the company released solid second-quarter results and disappointing guidance.

So what: Quarterly revenue rose 17.2% year over year, to $99.3 million, which translated to net income that more than doubled to $11.8 million, or $0.10 per diluted share. Analysts, on average, were modeling earnings of $0.09 per share on sales of $98.6 million.

However -- and this explains the sharp early-morning drop -- Lattice Semiconductor also expects current-quarter revenue to fall 8% to 12% sequentially, or to a range of $87.4 million to $91.4 million. By comparison, analysts were looking for significantly higher third-quarter revenue of $98.5 million.

Now what: But to appease investors and explain the guidance shortfall, Lattice CEO Darin Billerbeck pointed to "softness in our communication business in Q3 as the few of our larger OEMs work through what we believe is inventory correction." With this in mind, the company does expect to see customer volume increase in the fourth quarter, thanks both to new model launches by those large OEMs, as well as new business from Lattice's China customers.

In the end, and considering next quarter's expected results should only be a temporary hiccup, I think patient, long-term investors could do well to consider using today's drop to add to or open a small position.

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A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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