CLOSING: ARM HOLDINGS

• We are cutting ARM here, the stock has fell out of favour of late despite posting a 37% rise in 1Q license revenues and strong expectations for the 2H
• The market has focused on royalty revenues, which rise of 3%, disappointed given its valuation
• We still believe ARM is a great long-term play, leveraged into the next tech revolution – The Internet of Everything. The Internet of Everything will be bigger than the smart phone market and ARMs low power high performance chips give it a distinct advantage in this new market
• We will revisit ARM in the near future however at the moment it lacks a catalyst and we see it drifting further in the short-term

 

Mon, 24 Feb 2014 16:50

ARM: Chip off the block…

 

• The stock is off 1.9% since we published our original idea on 15th Jan 2014
• We still believe that this stock is a great mid to long-term play, and well positioned to benefit from “The Internet of Everything”
• The Mobile Congress in Barcelona this week will unveil a lot of the global tech giants futuristic wares and although the rivalry between these firms are fierce, most share a common feature…an ARM microchip!
• ARM posted a rise in pre-tax profit & revenue in earnings this month however the stock traded off on concerns over a slowdown in premium smartphone chips. With only 1/3 of the worlds current phones currently “smart”, we still see plenty of upside in its phone microchip business
• CEO Segar pointed out in an interview with the Telegraph last week that he sees growth coming from “everywhere” and notes an accelerates in innovation at the low to mid-range end
• Buy them while you still can below 1000p

 

Wed, 15 Jan 2014 17:03:

 

• Nice 10% pull back this year
• I feel this is a decent entry level for a MT/LT play..
• One of the big themes for this year i am seeing in numerous places is The Internet of Everything
• Google who are now undoubted leaders in internet Innovation and are making a big push in this area
• The recent acquisition of Nest bears testament to that..
• Nest exemplifies the “amazingly strong integrated strategy that Google has to connect all of our devices, all of our lives, from our car, to our navigation system, to how our garage doors are going to open.”  said Walter Isaacson, author of the best-selling biography “Steve Jobs.”
• There is also the Internet of everything business angle. See the recent Economist piece The Internet of Everything Business Index – A quiet revolution gathers pace (Economist – The Internet Of Things)
• ARM will be at the centre of all this….