Opinion on  SiRF Technology Holdings Inc (SIRF)     Sector: Technology  >  Industry: Communications Equipment
A New Swell Could Be Brewing

For the unitiated, that's surfer lingo in my title. Just kidding. Anyway, today SiRF Tech (SIRF) is getting a big pop as it breaks out of its recent consolidation.

I have traded this stock many times over the last couple of years, and it is now back at attractive levels. The stock has been mired in a downtrend since reporting earnings last quarter. They also made an acquisition recently. But regardless of whether they merely match current estimates, I feel the protracted decline in the stock more than prices in such an outcome.

This company still has strong fundamentals and a rosy growth outlook, imo. I believe the wireless opportunity for them will be big. I hope to hear more about how it is progressing on their next earnings call. Nonetheless, I think the action today could be the end of the recent decline, and the start of a new uptrend for the stock.

long SIRF

SiRF Tech. (SIRF) got another boost today after TomTom reported strong Q2 results.

TomTom raised its 2007 personal navigation device (PND) unit forecast, implying a positive trend for SIRF. TomTom said the outlook is strong both in Europe as well as the U.S.

I have said that in addition to the PND market, I thought 2007 would be a good year for SIRF as its location-based services (LBS) rolled out at wireless operators. The analyst note out this morning from Jeffries maintains the same thesis.

The analyst has a $34 price target on the stock. I have been looking for a run back to $30, where I would look to take profits on my recently added shares.

Today, the stock got up to $25, and has risen more than +20% from its June bottom. I actually hedge my long position a bit on this morning's strength. I am still holding out for higher prices, but the company reports earnings next Tuesday, and that has been a significant source of volatility in the past.