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    Stock Alert for Integrated Device Technology Inc. (IDTI)

    Integrated Device Technology (IDTI) designs, develops, manufactures and markets a range of semiconductor solutions for the advanced communications, computing and consumer industries. The Company’s communications products target markets, including the enterprise, data center and wireless markets. Its computing products are designed for desktop, notebook, sub-notebook, storage and server applications, while its consumer products are optimized primarily for gaming consoles, set-top boxes, digital television and smart phones. IDTI markets its products on a worldwide basis primarily to original equipment manufacturers (OEMs) through a variety of channels, including a direct sales force, distributors, electronic manufacturing suppliers (EMSs) and independent sales representatives.

    IDTI was founded in 1980, and is headquartered in San Jose, California.

    Share Statistics (01-Feb-11) FY

    2009

    FY

    2010

    %

    Chg

    Q3

    2009

    Q3

    2010

    %

    Chg

    Symbol IDTI Revenue, $Mn 663.25 535.91 -19.2% 139.50 166.91 19.6%
    Current price $7.08 Gross marg. 41.4% 42.0% 1.4% 36.7% 54.1% 47.4%
    52wk Range: $4.82-$7.28 Oper. margin -7.4% 11.7%
    Avg Vol (3m): 2,267,130 Net margin -157.6% 7.5% -104.8% 43.4% 12.1% -72.1%
    Market Cap. 1.09B
    Shares Outstanding 153.53M EPS, $ -2.15 0.05 -102.3% 0.07 0.14 100.0%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    IDTI reported the following highlights for the quarter ended fiscal third quarter ended January 2, 2011:

    -The world’s first Serial RapidIO Gen2 switches with virtual channel and security functionality to improve network performance and scalability of 4G LTE deployment.

    -The industry’s first fully JEDEC-compliant Memory Buffer for DDR3 LRDIMM, enabling a new generation of DDR3 memory technology for servers, workstations and storage equipment.

    -It demonstrated the world’s lowest power DDR3 register running at an industry-first 1,867Mbps in a standard server at the Supercomputing 2010 (SC10) conference.

    -The industry’s first signal-conditioning re-timers that are fully compliant with the upcoming release of the PCI Express® 3.0 standard, for use in servers, enterprise storage and communications systems.

    -The industry’s first single-layer multi-touch capacitive touch screen controller, which simplifies the sensor manufacturing process and lowers cost without sacrificing features or performance.

    -It demonstrated the world’s first usage of the DisplayPortTM auxiliary channel to carry touch screen data to the operating system in tablets, notebooks and other display devices.

    -The introduction of the industry’s first DisplayPort-over-Ethernet adapter based on the IDT VLX1000 PanelPortTM LinkXtendTM device.

    -A new family of DisplayPort-to-HDMI or DVI translators targeted at tablet and multi-monitor applications.

    Its new real-time clock with temperature compensation, providing high accuracy and ultra-low power for use in utility metering, HVAC, point-of-sale terminals, security alarms, vending machines and other security-related equipment.

    The chipmaker reported fiscal third quarter adjusted earnings of 15 cents per share, just a penny ahead of the consensus estimate. Revenue jumped 8% year-over-year to $153.2 million, which was in line with expectations.

    “Our third-quarter results were in line with our prior projections as we continue to execute our long-term strategy,” commented IDTI president and CEO Dr. Ted Tewksbury. “We made significant progress reducing channel inventories during the quarter, while growing sales in the enterprise computing end market. We are well positioned to accelerate revenue and earnings growth in the second half of this calendar year as our core business improves and new products continue to ramp, driven by cloud computing and the rollout of 4G/LTE wireless infrastructure.”

    New Products

    IDTI has unveiled what it claims is the industry’s first touch screen controller IC optimized for its proprietary single-layer multi-touch projected capacitive touch screen technology. The new touch screen technology and controller solution offers a true single-layer solution, not requiring cross-over isolation points that other solutions require, yet still maintaining full multi-touch capability. The result is a lower-cost total solution that does not sacrifice features or performance.

    “The new LDS7000 family of touch controllers enables our customers to take full advantage of IDT’s true single-layer touch screen technology,” said Alvin Wong, IDIT general manager of the Advanced User Interface group. “Our innovative design and multi-touch capabilities allow touch screen manufacturers to simplify their manufacturing processes, yet maintain the critical feature set that is required for today’s most advanced consumer devices. IDT continues to extend its presence in breakthrough capacitive touch technologies and designs that improve the user experience, so our customers can deliver winning products to the market.”

    The Company also recently announced industry-first fully JEDEC-compliant Memory Buffer for DDR3 LRDIMM.  It claimed the new memory technology dramatically increases performance of memory-bound applications such as cloud computing and virtualization.

    “IDT is the industry leader in memory buffer technology dating back to FBDIMM, and that expertise and domain knowledge is applied to our MB3 products for DDR3,” Mario Montana, IDTI vice president and general manager of the Enterprise Computing Division, stated in a press statement.  “We have worked diligently with our customers, ecosystem partners and the JEDEC standards group to bring this new technology to fruition.”

    IDTI jumped 10.97% to $7.08, and was one of the largest percentage gainers on the Nasdaq Tuesday. Shares traded on high volume of 8.98 million shares as compared to its average daily volume of 2.30 million shares.  The stock is currently trading above its 50-day and 200-day moving averages of $6.68 and $6.5, respectively.  At Tuesday’s closing market price, IDTI’s market capitalization stands at $1.09 billion.

    Visit IDTI at www.idt.com

    Financial Summary

    IDTI reported revenue of $153.2 million for the fiscal third quarter of 2011, up 8% from $142.5 million reported in the same period one year ago.

    GAAP net income for the fiscal third quarter of 2011 was $10.6 million or $0.07 per diluted share, versus a GAAP net loss of $7.4 million or a loss of $0.04 per diluted share in the same period one year ago. Fiscal third quarter 2011 GAAP results include $5.6 million in acquisition and divestiture related charges, $4.5 million in stock-based compensation and $3.3 million in restructuring-related costs.

    Non-GAAP net income for the fiscal third quarter of 2011 was $23.0 million or $0.15 per diluted share, compared with non-GAAP net income of $17.3 million or $0.10 per diluted share reported in the same period one year ago.

    GAAP gross profit for the fiscal third quarter of 2011 was $82.5 million, or 53.9 percent, compared with GAAP gross profit of $59.7 million, or 41.9 percent, in the same period one year ago. Non-GAAP gross profit for the fiscal third quarter of 2011 was $88.2 million, or 57.5 percent, compared with non-GAAP gross profit of $72.8 million, or 51.1 percent, reported in the same period one year ago.

    GAAP R&D expense for the fiscal third quarter of 2011 was $46.1 million, compared with GAAP R&D expense of $38.3 million reported in the same period one year ago. Non-GAAP R&D expense for the fiscal third quarter of 2011 was $41.3 million, compared with non-GAAP R&D of $34.6 million in the same period one year ago.

    GAAP SG&A expense for the fiscal third quarter of 2011 was $27.1 million, compared with GAAP SG&A expense of $24.8 million in the same period one year ago. Non-GAAP SG&A expense for the fiscal third quarter of 2011 was $23.3 million, compared with non-GAAP SG&A expense of $21.0 million in the same period one year ago.

    Source: www.idt.com


    Financial Strength (01-Feb-2011) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 3.75 0.53 1.26 0.63
    Current Ratio (MRQ) 4.21 0.64 2.12 0.96
    LT Debt to Equity (MRQ) 0.00 5.78 12.70 107.74
    Total Debt to Equity (MRQ) 0.00 10.87 22.08 152.28
    Interest Coverage (TTM) 0.01 0.56 14.04

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    This is the consensus forecast among eight polled investment analysts. Against the Integrated Device Technology Inc company.

    Analyst Detail Buy Outperform Hold Underperform Sell No Opinion
    Latest 5 0 3 0 0 1
    4 weeks ago 5 0 3 0 0 1
    2 months ago 5 0 3 0 0 1
    3 months ago 5 0 3 0 0 1
    Last year 5 0 5 0 0 0

    The seven analysts offering 12-month price targets for IDTI have a median target of 7.50, with a high estimate of 10.00 and a low estimate of 6.00. The median estimate represents a 17.55% increase from the last price of 6.38.

    Source: markets.ft.com

    Consensus Estimates Analysis


    # of Estimates Mean High Low 1 Year Ago
    SALES (in millions)
    Quarter Ending Mar-11 7 145.79 153.20 140.00 149.85
    Quarter Ending Jun-11 6 149.80 153.11 146.00 163.30
    Year Ending Mar-11 7 622.18 630.37 615.20 590.66
    Year Ending Mar-12 7 645.01 670.00 630.00 652.15
    EARNINGS (per share)
    Quarter Ending Mar-11 7 0.12 0.14 0.10 0.10
    Quarter Ending Jun-11 6 0.12 0.16 0.11 0.18
    Year Ending Mar-11 8 0.58 0.60 0.56 0.37
    Year Ending Mar-12 8 0.56 0.64 0.46 0.86

    Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=IDTI.O


    Technical Analysis

    Source: http://stockcharts.com

    On Monday, IDTI closed above its 20-day moving average. This is generally considered to be an indication of a bullish trend.

    IDTI’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility.

    IDTI’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Feb02-2011 symbol Share, $ $ Mn 2010 2011 2010 2011
    LSI Corp. LSI 6.36 3.92B 12.23 10.10 1.46 1.35
    Exar Corp. EXAR 6.62 294.25M n/a n/a 2.01 1.85
    Integrated Silicon Solution Inc. ISSI 10.69 281.56M 8.22 6.48 1.05 0.94
    Cypress Semiconductor Corp. CY 21.91 3.63B 19.39 14.32 3.70 3.27
    Texas Instruments Inc. TXN 35.00 40.86B 13.41 12.64 2.84 2.77
    Semiconductor – Broad Line Median 16.60 n/a 2.73 n/a
    Integrated Device Technology Inc. IDTI 7.09 1.09B 12.02 12.44 1.75 1.68

    Source: Thomson Financial

    Insider Trading Activity

    NET SHARES PURCHSE ACTIVITY

    Inside Purchases – Last 6 Months

    Shares Transaction
    Purchases 3,000 3
    Sales 20,530 10
    Net Shares Purchased (Sold) (17,530) 13
    Total Insider Shares Held 139.71K n/a
    % Net Shares Purchased (Sold) (11.2%) n/a
    Net Institutional Purchases — Prior Qtr to Latest Qtr
    Shares
    Net Shares Purchased (Sold) (21.273,000)
    % Change in Institutional Shares Held (16.37%)

    Source: Yahoo Finance

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