SiRF Technology (SIRF) worth a look

One of the largest producers of GPS chips is trading near a 52-week low and sells for only $5.37 a share, the company?

SiRF Technology Holdings Inc.  (NASDAQ:SIRF).

SiRF shares got crushed Friday, falling near 14% after reporting a Q2 outlook that disappointed the Street.  SiRF's forecast for Q1 anticipates much greater than normal seasonality and uncertainty with revenue in the range of $71 million to $77 million and non-GAAP EPS from a loss of $0.04 cents to break even. Since February SIRF shares have fallen off the map, plunging from $30 to $5:

The downgrades have come in like crazy and the analysts that cover SiRF are saying there's no way they can compete with research and development spending of larger competitors. There's inventory build-up in the retail segment as well as market share loss and sharp price declines.  Just because they produce GPS chips doesn't mean jack because there are a ton of companies that are going to take them down, just as Wall Street has taken down their shares.

Analysts covering SiRF have lost faith in the company, the ratings show the pessimistic outlook:

Date	Rating	Target Price	Analyst
04/25/08	Sell	-	Dougherty & Company
03/27/08	Hold	-	Collins Stewart
03/26/08	Neutral	$ 5.50	UBS
03/26/08	Sector Perform	$ 5.00	RBC Capital Markets

More downgrades are coming thanks to last week's earnings report, Q1 revenue came in at $62 million but they lost $28.1 million.

To quote Diosdado Banatao, Executive Chairman and Interim President and CEO of SiRF Technology Holdings:

“This was a difficult quarter for SiRF. The economic uncertainties and continuing weakness in consumer demand noted in our February 4 conference call and March 25 press release, and increased market competition, resulted in significant challenges for SiRF and many of its customers, and reduced revenue and gross margins.”

The Masters believe SiRF is headed for a new 52-week low, but it could be helped out by bottom fishers this week.  The company isn't dead yet, and that's why we want you to put SiRF on your watch list.  With shares so low, a few good things could happen, maybe someone buys them out or the company starts to buy back their shares aggressively.  SiRF's management is in a tough spot right now, they need to come up with something to keep investors faith after watching their stock fall 68% in the past 3 months.

For investors waiting on the sidelines, wait for the stock to hit a new low, then over 2008 we should see at least a 10% return from today's closing price on no news but reduced earnings results.  With the stock trading at $5 and change and fair financials for a $326 million market cap, SIRF is worth a look:

Financials

 (In millions of USD)

Disclaimer: The Author has no positions in SIRF.