Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Internet protocol television (IPTV) chip specialist Sigma Designs (Nasdaq: SIGM) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Sigma's business and see what CAPS investors are saying about the stock right now.

Sigma facts

Headquarters (Founded)

Milpitas, Calif. (1982)

Market Cap

$328.5 million



Trailing-12-Month Revenue

$242.1 million


Founder/CEO Thinh Tran
CFO Thomas Gay, III

Return on Equity (Average, Past 3 Years)


Compound Annual Revenue Growth (Over Past 3 Years)



$129.1 million / $0


Broadcom (Nasdaq: BRCM)
STMicroelectronics (NYSE: STM)
Texas Instruments (NYSE: TXN)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, nearly 99% of the 504 All-Star members who have rated Sigma believe the stock will outperform the S&P 500 going forward. These bulls include my fellow Fool Anders Bylund (TMFZahrim) and traviskang, both of whom are ranked in the top 10% of our community.

A few months ago, Anders tapped Sigma as the perfect way to break the rules:

There's a lot of growth and good, steady business going on here, and analysts expect Sigma's earnings to grow by 20% a year over the next five years. Sigma is a longtime [Motley Fool Rule Breakers] recommendation and a five-star CAPS stock. ... If this isn't an entry point, I frankly don't know what is.

Sigma continues to be one of the purest ways to play the emergence of digital media products, and in particular, IPTV set-top boxes. While the company's IPTV processors compete with offerings from much larger foes like Broadcom, Texas Instruments, and STMicro, Anders also explained recently how Sigma's MIPS processing concentration gives it an enviable position in the space. With the likes of Netflix (Nasdaq: NFLX) and Yahoo! looking more and more serious about their streaming ambitions, CAPS member traviskang thinks Sigma's potential is too big to ignore:

Long-term value, with Hulu, Netflix, and iTV entering the market and becoming popular Internet content providers (entertainment), the IPTV market will take over the traditional cable/sat co's. In a decade, I see only 1 medium of communication and that's through the Internet. [I]f [Sigma] develops the proper partnerships/attracts the right clients then its potential growth is enormous!

What do you think about Sigma, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Sigma is a Motley Fool Rule Breakers selection. Netflix is a selection of Stock Advisor. Try any of our Foolish newsletter services free for 30 days.

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