Himax Technologies (NASDAQ:HIMX) has been on a terrible run in 2014, having lost 55% of its market cap until now. The company has been vastly affected by the Bank of America downgrade and rumors that Google will not be using Himax's glass in Google Glass. However, I think Himax is currently undervalued and investors should consider buying it at present valuations
How the long haul looks like
Himax appears to be in a bad position as it is not yet profiting from the Google (NASDAQ:GOOG) (NASDAQ:GOOGL) Glass not surprisingly. Himax's LCOS microdisplays were to be utilized for Google Glass. Nonetheless, since this business accounts just for around 18% of the organization's aggregate income, it is not going to influence the organization a whole lot, at any rate for the time being.
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- HIMX 15-Year Financial Data
- The intrinsic value of HIMX
- Peter Lynch Chart of HIMX
Google Glass' genuine dispatch has been deferred since long as Google is wanting to create a chic rendition of the Glass and on the off chance that it turns into a standard item, and makes an imprint in the business sector for head-mounted presentations, then Himax is unquestionably going to benefit. This portion is additionally indicating robust development as it developed 45% year over year in the past quarter.
The extensive board IC portion, which is the organization's strongest business section, saw development because of an expansion in offers of driver Ics for TVs, consequently counterbalancing the impact of record books and screen Ics. This development is accredited to a build in TV deals in China and the climbing creation of 4k Tvs.
Cell phone development
Himax's driver business likewise incorporates Ics, which are utilized within little and medium-sized boards for applications including cell phones, tablets and auto. Despite the fact that cell phones have had the capacity to drive deals, the stock adjustment by the organization's Korean end-client is prone to cut down cell phone IC deals in the second quarter. At long last, for the little and medium-sized driver fragment, the organization anticipates that income will be down for driver Ics for cell phones.
The organization's Chinese business sector is picking up force, and the results are required to show in the second a large portion of the year as 4g LTE appropriation and determination moves up to high definition will go standard. Its substantial presentation driver business is required to increase footing, while board shipments for 4k TVs to help the developing customer base will be an alternate impetus.
4k TV shipments will expand to 13 million units not long from now from only 1.9 million units a year ago, and China will have a 78% share of this business sector. Also, the little board show drivers of Himax are additionally utilized within Chinese cell phones and the organization can pick up from the expanding appropriation of LTE handsets. LTE cell phone shipments are assessed to build a great 547% in China to 135 million units in the not so distant future.
Non-driver will prompt long haul development
The organization's LCOS business is doing great and remains the organization's long haul development driver. Himax heads with its LCOS microdisplays in the business. The organization is taking a shot at different new outlines with top organizations, including some custom-manufactured plans from clients' improvement charges. Furthermore, the organization likewise is working with some top-level clients on head-mounted engineering item advancement.
The organization's non-driver business is the thing that drives great development and counteracts rivalry. Himax has ability in picture preparing and human interface-related innovations, alongside different other non-driver items, for example, CMOS picture sensors, touch board controllers, power administration Ics and ASIC administrations which can create great brings about the following quarter, enlisting twofold digit development.
Himax exhibits a very appealing valuation alongside a cash dividend of $0.27 for every American depository share. Likewise, the organization anticipates that its earnings will develop at a yearly rate of 40% for the following five years. The organization runs at a low obligation to-equity proportion of 0.23, which remains underneath the business normal and means its fruitful administration of obligation levels. All things considered, the organization is worth taking a gander at for investors going into earnings.