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Msg  13 of 56  at  6/30/2011 4:38:31 PM  by


my mid year review of GGOX

 NTRO Here's my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.

GGOX (market cap $0.025B)
GigOptix is so high-tech I don't try describing it to anyone except those that understand internet and telecom backbones or physics and organic chemistry. I certainly don't understand the technical details but here's my attempt at describing their business.

GigOptix sells very high speed switches to companies that operate and install high-capacity information networks, or how build exotic high-quality machines like satellites. Their optical-electrical switches operate at the boundaries between fiber optic networks (photons in fiber optics) and conventional information networks (electrons in metal wires). I know about and am particularly interested in the highest end product that is based on organic (as in organic chemistry, not biology) materials because I was originally investing in the company Lumera (LMRA) that they merged with a few years ago.

The company seems to have great potential, is already making money, and has much room for product expansion considering the other applications for their technology (steerable smart antennas with no moving parts, biotech labs on a chip, etc.). The company is very small, which may be why a lack of management visibility is an issue for me, but that may be because I was able to visit the company when their headquarters and meetings were local. For me, the financial statements are more convoluted than I expect from a small company, but that may be because they have grown through mergers and acquisitions. I find it surprising that price/book is only ~2 and that price/sales < 1. Those look like retailers' numbers, not what I expect from a high-tech electronics manufacturer.

DISCLOSURE LTBH of LMRA since 2004, and actually bought some more within the last year or so, despite the very small market cap.
(I've also collected links to the other discussion boards and my other stocks over on my blog

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