Can anybody out there recommend a good beer to go with a plate of crow? Maybe I didn't make a table-pounding buy call on Genesis Microchip
Yeah, well, maybe it's tough, but that's still exactly what investors should have done. To add injury to insult, shares of rival Trident Microsystems
First off, revenue was down 18% on a sequential basis as the company saw weakness in both the TV and monitor segments. On the TV side, results were hurt by lower sales in both Europe (flat TVs) and China (CRTs). Making matters worse, I think what's really happening is that the second- and third-tier vendors that make up some of Genesis' customer base are losing share to the higher-end manufactures supplied by Trident, among others. That lower revenue in turn led to the usual results -- that is, lower margins and lower earnings.
That's all bad enough as it is, but it gets just a little worse, too. The company admitted that it has lost some share at customers LG and Toshiba, and there's just no way that's good news. That's especially true since I don't think new business at Samsung or Sony
So now that I've fired a few slugs into Genesis, what do I think about the stock? Well, it looks cheap -- barring a complete collapse, that is. But cheap doesn't necessarily mean value. And I'm fully willing to acknowledge that my long-held soft spot for this company (I've owned it a few times and made money on each go-around) might be blinding me to its faults. With all of that in mind, I can't really advocate anybody else owning this, unless you want to risk joining me at the all-you-can-eat roast crow buffet again in the future.
For more chippy Foolishness:
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).