CSR still a bargain

CSR has now recovered all its SP losses after the preliminary results were published and is now back where it started! And it is still a very obvious bargain!

Here is the deal: 2006 revenue growth of over 90%. 2006 PE of 20.

The is based on an EPS of 60p for 2006 which is not an optimistic estimate.

Why is the price so cheap? Here are some ideas:

- SP has already tripled since last summer. Psychologically it is hard to buy shares that have already had an amazing run.
- Texas Instruments and Broadcom are competitors. Investors assume that the US giants are going to gobble up the Bluetooth market sooner or later.
- Financial websites have incorrect data. CSR reports in dollars which seems to confuse the financial websites. For example III has 2005 eps as 0.67p rather than $0.67. The difference is rather substantial!
- Bluetooth not well understood. Unless you have used Bluetooth yourself you may not realise its potential and just assume it is a technological fad that is going to be replaced by something else soon.

Here is another important nugget: In 2005 CSR won 60% of all Bluetooth design wins. That means it current 50% market share is not going to dwindle any time soon.

CSR has about the best risk / reward ratio I can find at the moment.

This one is still a buy and I will be averaging up when I have the opportunity.