Why I'm Finally Buying Into Cirrus Logichttp://www.fool.com/investing/general/2013/04/17/why-im-finally-buying-into-cirrus-logic.aspx Evan Niu, CFA
April 17, 2013
As the resident Apple (NASDAQ: AAPL) permabull, I've always been on the lookout for derivative component plays. The smartphone and mobile revolution has been one of the most powerful storylines over the past couple years, particularly after Apple revolutionized the industry in 2007.
A long and winding road
Once upon a time, I was also an OmniVision (NASDAQ: OVTI) bull, thinking the image sensor specialist's lead in backside-illuminated technology gave it a substantial leg up against the competition. When OmniVision lost the iPhone 4S primary camera spot to Sony, that was just the first sign that things may never be the same. The company subsequently lost the iPhone 5 primary sensor, also to Sony. HTC has gone with STMicroelectronics for the "UltraPixel" sensor in its One flagship (OmniVision sources the secondary sensor), which lends to the idea that BSI sensors are becoming commoditized. Goodbye, pricing power. I gave up on OmniVision long ago.
Throughout this whole time, Cirrus Logic (NASDAQ: CRUS) has been on my radar as the primary supplier of audio codec chips in iDevices, with Apple comprising 91% of sales in the December quarter. I've never invested in the company, primarily due to a feeling that I'd missed the boat already. Shares topped out over $45 late last year, making me think Cirrus would always be the one that got away.