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What: Shares of chip maker Power Integrations
So what: Power Integrations also announced a settlement with the IRS for an audit of the company's 2003 to 2006 results. This will help the company substantially reduce its tax burden in the upcoming year to "the high single digits," according to the company's earnings release. The tax benefit may well be offsetting weak guidance, lessening the sting of reduced demand in a tricky macroeconomic environment.
Now what: A P/E of 33 isn't cheap, and the company's bottom line hasn't had a lot of upward momentum in the last two years. With the tax benefit to be baked into Power Integrations' expectations, it seems like the stock may continue to drift sideways until a major catalyst appears.
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