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View Full Version : A stock pick: Spreadtrum Communications



AirJer
03-04-2011, 01:00 AM
I recently heard about a (chinese) semi-conductor company (nasdaq: SPRD) that makes products which would allow a cell phone user to be able to switch between carriers to access the best rates/services. I was intrigued.

After learning a BIT about the company, I purchased a very small stake to test out the waters. Today, riskily, I added to that position BEFORE their earnings announcement. I hear you're never supposed to do this, but since they were trading down towards a moving average, I figured I'd take a gamble :D. Well, after their earnings announcement, the stock popped 13%:eek:

Here's a snippet of a marketwatch article re: their earnings report:
"Spreadtrum Communications Inc.'s (SPRD) fourth-quarter earnings soared, beating analysts' estimates, as revenue jumped sharply and margins improved.
The company also forecast current-quarter revenue of $130 million to $135 million. Analysts surveyed by Thomson Reuters expected $109 million.
Shares rose 11% to $23.95 after hours. As of the close, the stock had more than tripled in value the past year.
The fabless semiconductor company, which is based in China and makes and sells baseband communications chips for the wireless telecom market, has seen its results improve lately after it was hurt by lower consumer spending and tighter access to credit during the recession.
Spreadtrum reported a profit of $30 million, or 56 cents an American depositary share, up from $1.4 million, or 3 cents, a year earlier. Excluding items such as stock-based compensation expenses, earnings rose to 61 cents from 6 cents."

I am no expert on this company, and I don't want to post anything misleading, so I'll leave it at that. I will be adding again to my position tomorrow, after I buy some more SLW ;)

This might be one for your watch list! DYODD