I can see the company earning $1.50 in 2008 and Over $2.00 in 2009 based on current trends in the core business and only modest success of the new "large opportunities" that the company discussed in its last conference call..
Now if the company executes on its buyback and actually buys more as it indicated it might do, this could increase earnings estimates above to $1.80 this year and around $2.50 for 2009. Given this kind of earnings power and growth $45/share is very reasonable even in the worst of market environments.
With over $7 in working capital (most of which is in cash) and design wins that give good visibility to the earnings estimates given above, there is relatively little downside. This is an ideal play in uncertain times especially for those who are unwilling to go bearish yet are concerned about high valuations given the fragility of the macroeconimic environment.
$10.01 (04/12/08)
