Cirrus Logic: Insiders chip in
Insiders turn bullish on the circuit maker with one director buying a $2 million position.
By Mark Skousen, Hedge Fund Trader Alert
Over the years, many of our biggest profits have come from riding the coattails of knowledgeable insiders.
You don’t get buy signals much better than top officers and directors investing significant amounts of their own money in their companies at current market price. That’s why I want to draw your attention to Cirrus Logic (CRUS).
Based in Austin, Texas, Cirrus supplies high-precision analog and digital signal processing components to the audio and energy markets.
The company is a proven innovator, holding more than 1,000 patents that are key to more than 700 products serving thousands of customers around the globe.
However, it has been a tough time for many technology companies lately. And Cirrus is no exception. In the most recent quarter, sales rose modestly but earnings plunged 64%.
Post continues below:
The stock -- which traded this spring above $25 a share -- now resides around $16.50. Of course, a low stock price in itself is never a reason to buy shares.
What excites me about Cirrus is that earnings are likely to hit $1.20 this year and then surge to $1.50 or more in 2012. In fact, shares already are beginning to move higher in anticipation.
My optimism about the future is confirmed by the recent actions of President and CEO Jason Rhode and Director Robert Smith.
Smith has bought 132,000 shares in recent weeks, an investment of more than $2 million. And Rhode has been buying the stock, too. He currently owns approximately 14,000 shares.
Rhode has made it no secret that he expects sales at Cirrus to keep growing faster than the semiconductor industry as a whole. And he sees enormous new opportunities developing in both portable audio and energy.
So follow his lead and use the recent market weakness to pick up Cirrus Logic while it’s still cheap. If you prefer to play this one more aggressively, try the January $19 calls.
- Is TV the next game-changers for Apple?
- Marvell Technology: After the flood
- Intel: Earn income from tech
Copyright © 2014 Microsoft. All rights reserved.
The company is scrambling to protect its equities arm, which could face declining volume and revenue as competitors close the gap.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.