ARM Holdings Plc (ARMH)
recognize the name from their ARM chips (processors) that come in all
sorts of electronics
ranging from mobile handsets, Smartphones and digital set top boxes to
braking systems, network routers and more. In fact over
20 billion ARM based have shipped to date and over 800 processor
been sold in more than 250 countries since ARM was formed in 1990.
more in the design and licensing of IP, as opposed to the manufacture
of the products
themselves. This structure allows them
to collect royalties on every ARM based product produced and keeps them
on development of products and services as well as forming partnerships
their products flowing into new technologies.
doing something right; ARM technology is used in 90% of smart phones,
digital cameras, and 28% of all electronic devices globally and yes,
are found in iPhones.
can be rather volatile and only recently has it begun to build bullish
momentum. With a P/E of 56, they will need to continue
to deliver strong earnings results.
Processors aren’t their only business;
The British Tech Company just announced a joint venture with two
technology companies to develop a new security standard for online
for Smartphones, tablets, game consoles and more. Their key is low
consumption, small size and fast processing.
Now that ARM processors can
run Microsoft Windows, the PC market could be another huge catalyst for
company. The company expects 100 billion
processors to be shipped by 2020.
Financial Profile &
ARMH is a mid-cap (13.06 billion) company that is trading at about 56
(expectations for next quarter) earnings. ARMH became a Zacks Rank 1
on April 3rd.
chip designer saw annual sales
increase 23%, which drove an earnings increase from $0.30 in FY2010 to
ARM has surprised analysts to the
upside 3 quarters in a row with a miss back in March of 2011 at an
average of almost
+11.37% surprise per report over the past year. Of the 7
analysts who cover ARMH,
the consensus is for the company to grow earnings by 22% in the current
(FY2012) and roughly 20% in FY2013. According to the Zacks
Estimate, expectations are for ARMH to earn 11 cents when they report
on April 25th.
The stock is currently trading arond $29 a share, look for
support around the $27.50 area, which is where the 50 and 200 day
moving averages are converging.
A Levy is the Momentum Stock
Strategist for Zacks.com. He is also the Editor in charge of the
Whisper Trader Service.