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Cirrus Logic Shares Plunged: What You Need to Know

By Anders Bylund - Updated Apr 6, 2017 at 10:07PM

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Is this meaningful? Or just another movement?

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: Unlike their high-flying, cloudy namesakes, shares of audio chip expert Cirrus Logic (Nasdaq: CRUS) are earthbound today -- falling as much as 11.4% on more than twice the average trading volume.

So what: Fourth-quarter earnings missed analyst targets by $0.02 per share and first-quarter sales guidance also disappointed the Street. It's the second earnings miss in the last three quarters, following a string of 10 straight meet-or-beat reports.

Now what: Cirrus shares are down more then 34% since the February peak, which coincides on an almost-spooky level with focal customer Apple (Nasdaq: AAPL) bouncing off its own all-time highs. Production yield issues hurt the bottom line this time but have been corrected and play no part in coming quarters. I recommended buying on the dip when Cirrus pre-announced these results two weeks ago, and the stock is only 8% more expensive today, so the advice still stands. Short-term issues don't really bother long-term investors.

Interested in more info on Cirrus Logic? Add it to your watchlist.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Cirrus Logic, Inc. Stock Quote
Cirrus Logic, Inc.
$77.21 (-4.48%) $-3.62
Apple Inc. Stock Quote
Apple Inc.
$163.76 (-0.61%) $-1.01

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