Start of the Day with Chris Forte – SILC

Posted on August 1, 2022 by Scott Shuda

The Small Cap Technology Grand Slam: Four winners on the way up, SILC, HLIT, BELFB, and RELL.

Let’s get the party started. You like a party, right? First up, Silicom (SILC), a leading provider of high-performance networking and data infrastructure solutions.

So why should I care about SILC? Here’s some clues – if you’re in a hurry just read what’s in caps. These are snippets from recent conference calls and press releases.

“2021 was a great year for Silicom: an INFLECTION POINT in the demand for our products during which SD-WAN’s COMING-OF-AGE brought us design wins of a whole new scale – some with 10x the revenue potential of past wins – along with numerous large opportunities. We therefore believe that WE ARE ON THE ROAD TO MASSIVE GROWTH.

“The source of our growth continues to be the disaggregation and decoupling trend, one of the MOST SIGNIFICANT TRANSITIONS OF IT-ARCHITECTURE IN A DECADE.

“We have been preparing for this trend for the past five years, developing critical technologies and products needed for its success while creating important relationships with both hardware and software partners.

“Today, with the SD-WAN market having REACHED THE GROWTH PHASE of its lifecycle, this strategy has begun to prove itself.

“However, we believe this GROWTH WILL BE COMPOUNDED by 5G/O-RAN, a market with characteristics similar to SD-WAN that operates within the same disaggregation and decoupling environment.

“The EXCEPTIONALLY STRONG MARKET DEMAND for our products is broad and is across our full product range. While last quarter, we discussed reaching our highest ever backlog. As of Q2 end, our backlog increased further.

“Looking forward, GIVEN THE ALL-TIME-RECORD LEVEL OF OUR PIPELINE – all compounded by the SPEED with which our target markets are developing – we are well positioned for continued strong growth in the years ahead.”

*Exceptional financial track record: 17 YEARS OF CONTINUOUS PROFITABILITY
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ROBUST DEMAND for our SD-WAN/Smart Edge platforms, 5G/O-RAN solutions
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STRONG book-to-bill ratio
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17 CONSECUTIVE quarters of on-track quarterly guidance (no misses)
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STRONG BALANCE SHEET: $165M Stockholders’ EquityXZ

The main challenge right now? Supply chain, but that is improving.

Take a guess how many shares are outstanding? Sorry, you’re a bad guesser. It’s less than 6.9M. The market cap is only $279M. Grab yourself a nice chunk of this great little company before others do. You get the One-Two punch of SD-WAN ramping now and 5G/O-RAN close behind.

I don’t know about you but I love words like “Inflection point” and “massive growth.” If you don’t believe me check out Breakout Investor Florian Buschek’s room for more coverage.
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QUICKIES
*
Scott Shuda introduces CVR Energy (CVI) on the Feed “…in large part due to its playing in multiple areas of interest – refining, biofuels, and fertilizer.”
*Economic sentiment started getting better within a week after retail gas prices peaked – Conor Sen
*Heads up, HLIT will announce Q2 results today after the close, INFU will issue Q2 results on Thursday before the market opens. INTZ after the close on Thursday.
*50% of gig workers say they would be okay getting paid in crypto.
*Stranger Things on Netflix trounced other streaming shows for the #1 spot.
*PS – After a discussion with a close friend this weekend with a famiiy crisis from hell, if you don’t have legal documents like a Health Care Power of Attorney, General Power of Attorney, or even a will, make the call tomorrow if you care about the people you love.

“Biden hasn’t been this sick since the time he got scurvy on Noah’s Ark.” — RUPAUL

Good luck to all – Chris

 Join us on the Breakout Investor Platform (BIP) to discuss SILC, CVI and other great little companies where our community shares research and analysis.  We seek to be Ahead of the Curve in identifying and owning great companies with catalysts that could make them the next Breakout Investment. Membership and most of the content on BIP is free.

Download the Breakout Investors app to join the conversation.

 
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