A screaming buy

It is not often that I find a UK company that screams out to me "BUY" but I think I did just that yesterday.

The company in question is CSR - the world's leading provider of Bluetooth integrated circuits. Bluetooth is the technology that allows wireless headsets for mobile phones and a multitude of other applications. It is a massive growth area along with WiFi, the larger range radio technology which is used for wireless networks.

CSR reported a blowout quarter on November 2nd, with revenues up 109% year on year and I do not think the market has fully digested just how fast CSR are growing.

I estimage CSR can earn 70 pence a share next year (yes this is converted from the dollar amounts reported in the earnings releases, unlike most financial websites!) That puts CSR on a forward PE of 13 - crazy for a company growing at these rates.

I do not see the growth of Bluetooth slowing down any time soon as it is being used in more and more cars, domestic appliances and consumer gadgets all the time. I recently bought a Bluetooth dongle for my PC for about £10 which allows me to transfer photos, videos and contact cards from my phone to my PC. Previously when I changed mobile phone I had to write down all my contacts but this time I just transferred them by Bluetooth onto my PC and then onto my new phone. I would not buy a phone that does not have Bluetooth.

Reading through the latest report I have not had any alarm bells go off. CSR have plenty of cash in the bank, little debt and are cash flow positive.

The share price has already more than doubled since August and that is probably partly why it is not considered cheap. However it looks very cheap to me and after a bit more due diligence I will be plunging in.