my end of year review of GGOX
INTRO 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 $0.039B)
GigOptix is so high tech that I don't try describing the details to anyone except the intensely curious or the engineering educated. (It would be too easy to display my ignorance.) They make very high-end electro-optical switches, the sort of equipment that converts electrical signals to optical signals and optical signals to electrical signals. (I just exposed an ignorance. Are those two different devices?) The materials are sophisticated enough to operate with very few moving parts, which allows them to operate at very high frequencies and which gives them a competitive advantage. Their customers are the companies that manage the communications backbone, so are driven more by technical specifications and operational costs than by press releases. They probably get some of the credit for enabling streaming video across the internet. Their customer industry should continue to grow, and they may find themself in a very nice niche that grows dramatically. The company has grown through acquisitions and product sales, more than doubling revenues from 2008 to 2010.
The stock languishes with price/book and price/sales more typical of construction firms instead of high-tech electronics. Simply being valued at six times 2010 revenues would suggest a quintupling of their current stock price. Either they are very poor at getting the word out, don't care about publicity, or the financial community has other reasons to avoid them (they are not on a major exchange, have a price less than $5, and there's always the possibility of private insider knowledge about significant internal or competitive issues.)
Company management is not very communicative, so speculation can be used to describe many aspects of this small but growing company but such speculation is not data, information, or a basis for definitive analysis.
DISCLOSURE LTBH of LMRA since 2004 and may have time to buy more at these low prices as they make progress and if I have discretionary cash (which I don't - let me check my lottery tickets).
(I've also collected links to the other discussion boards and my other stocks over on my blog trimbathcreative.wordpress.com)