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many new agreements, few opportunities +1

07:43 19-Jun-18


Integrated Device Technology has announced a partnership with Thetasys to expand sensor design services.  The collaboration should be particularly effective for motion and safety parts in the automotive and robotics industries.  Work like this typically takes at least a couple of years to bear fruit, but I think we can have fairly high confidence that it will.  In the meantime, I continue to see IDTI as at least fairly priced.

CUI Global's agreement with the Keele University, in the U.K., seems likely to be longer term, but it could give the company the inside track on further evolution of natural gas systems.  I think CUI is somewhat underpriced, but still GRoDT, of course.

I've also been getting periodic questions about OLED, which announced an agreement with Visionox a week ago, which typically omits any shred of detail.  As forecast, I haven't written about it or other developments because my outlook has not changed.  Just because OLED has stopped dropping doesn't mean it's time to buy, though media machine is starting to try to steer the market that way.  It wouldn't surprise me at all if those attempts are successful, but I still see fair value in the $80 range and don't really care what the stock does.   The long term risks are as stronger than ever, between trade troubles and Kyulux and Kateeva advancing their own partnerships.  UDC has been played by its customers before, to investor dismay, and it is quite possible that could happen again.  Consequently, I still do not intend to cover each of the many developments in this space in detail unless I see something that changes my outlook.

Similarly, I Schlumberger's business is showing signs of life, but its stock is not.  This could be an opportunity, but I am less willing than ever to take hydrocarbon-related risks.  In addition to the supply/demand games being played, my discussion with refinery managers indicates that there is risk from derivative chemical production, like ethylene cracking.

Finally, RESN is up on an open market share purchase from Park City Capital.  Resonant should announce hitting 25M parts in circulation in the coming months, but I do not regard PCC as a true insider and am not inclined to chase RESN, favoring value stocks like VOD and CTL instead, for the time being.