A recent article in the street.com had some points that were presumably missed in the initial report of clearfish. How do you propose to play the stock from here on? I am holding the stock as for now. Seems like it has a solid support at $8.00.
On a side note, I am an ardent admirer of your blog and visit it several times a day to catch the latest post. I would really like to see more posts.
 

Thank you for the heads up on TheStreet.com Himax write-up, as well as your kind words. As I see it, companies fall somewhere on a spectrum with one end being "really need the money to survive" and the other end being "don't need the money". Google is an example of the latter - completely funded from operations, but forced to come public, and able to use the money. I always ask, 'do they need my money, or are they just going to let me share in their profits?' The latter are what I consider for investments (almost anything can be a trading vehicle).

Himax seems to me to be completely funded from operations. Under those circumstances, I do not begrudge managers and early investors from taking profits - that's what you're supposed to do when you have created and/or run a profitable venture. It's quite another story when you are running a dog and trying to do the same. The question is whether the company has been saddled with debt, or some other handicap in the process of rewarding the key players. From my reading, that is not the case for Himax.

The first couple of items TheStreet.com highlights are compensation issues that I have no problem with, based on the above.

The internal control issues are not atypical for a new and growing company, and will likely be remedied quickly through new hires and new tools, now that they must fix them. Such worries are also typical of Chinese ventures, are a reason that we often distrust Chinese numbers, and that we demand performance that exceeds the possible control risks.

Finally, the single customer, and the accounts payable issues are material risks, and we agree that Wall Street may stay away from this stock until the company's performance is confirmed. That has made for an easy buying opportunity. I do not expect much action in the stock until perhaps sometime after their next quarterly report.

I am holding HIMX. If their numbers were to disappoint or show a slowdown, I would sell. If the price drops without a fundamental deterioration, I might accumulate. But that is just me and my unique situation, and while it doesn't happen often, I can be spectacularly wrong.
 

i just saw that analysts have started monitoring HIMX and have given it an outperform rating.

On a side note...i think that the market is in for a major overhaul...we cannot runup continuously disregarding the various factors against economy right now (oil, war, dollar devaluation, trade deficit, us debt)....and i am talking not about just our stock market...but around the world...especially emerging markets that have heated up too much in the recent past..what is your opinion on it...
 

have read your blog on Himax. thanks for those insights. As it is, I have had long interest in HIMX since after the IPO. This has led me to do more industry research, at least on what is generally available news (Digitimes.com being a big one).

TheSteeet.com and others have pointed out that Himax is still owned partly (about 14% of outstanding stock) by Chi Mei Optoelectronics--CMO, and the two companies share directors etc. and that this is bad for Himax, specially since CMO is also one of its biggest customers, if not the biggest.

From my research, this is not necessarily bad. First off, the whole LCD panel industry has only about 5-6 world-competitive players and CMO happens to rank as one of them. Secondly, fabless LCD driver design houses have an alliance with LCD panel makers--that's just how this industry seems to work. Himax benefits from have "related parties" in high places of food chain because it ensures some steady revenues.

As it turns out, HIMX reported its second quarterly last night and noted that revs from related parties have been trending down as plan and there has been no business disruption. HIMX has been able to gain share at other LCD panel makers, specially in the higher margin large-panel segment. Most likely loser in this battle is Himax's closest competitor, Novatek. HIMX has been able to get orders from CMO's competitor, Samsung.

Of course, with ASPs trending down industrywide, HIMX has also been affected. But all in all, it has weathered a weak first half of the year quite well, growing YoY numbers in high double digits. The outlook is also improving.

I just wanted to make some of these comments on here.

As always, do your own due diligence. I'm still long on this stock.


Thanks.
 

have read your blog on Himax. thanks for those insights. As it is, I have had long interest in HIMX since after the IPO. This has led me to do more industry research, at least on what is generally available news (Digitimes.com being a big one).

TheSteeet.com and others have pointed out that Himax is still owned partly (about 14% of outstanding stock) by Chi Mei Optoelectronics--CMO, and the two companies share directors etc. and that this is bad for Himax, specially since CMO is also one of its biggest customers, if not the biggest.

From my research, this is not necessarily bad. First off, the whole LCD panel industry has only about 5-6 world-competitive players and CMO happens to rank as one of them. Secondly, fabless LCD driver design houses have an alliance with LCD panel makers--that's just how this industry seems to work. Himax benefits from have "related parties" in high places of food chain because it ensures some steady revenues.

As it turns out, HIMX reported its second quarterly last night and noted that revs from related parties have been trending down as plan and there has been no business disruption. HIMX has been able to gain share at other LCD panel makers, specially in the higher margin large-panel segment. Most likely loser in this battle is Himax's closest competitor, Novatek. HIMX has been able to get orders from CMO's competitor, Samsung.

Of course, with ASPs trending down industrywide, HIMX has also been affected. But all in all, it has weathered a weak first half of the year quite well, growing YoY numbers in high double digits. The outlook is also improving.

I just wanted to make some of these comments on here.

As always, do your own due diligence. I'm still long on this stock.

Thanks!