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Hope for InvenSense: drones and microphones ?2
INVN has shown some appreciation lately in an otherwise flat market. To my mind, this just highlights the reasonable valuation, though financial presentations could also have something to do with it. Management just began a spate of them yesterday, with the last and largest coming a week from today. However, the source material doesn't indicate any fundamental change to me. The Coursa initiatives get only the briefest mention, and in response to my request for comment on the topic, InvenSense simply indicated that there is nothing significant to report.
However, there is some hope in a diversifying product mix. Drones continued to be hyped as a big growth arena, with Xiaomi being the latest entrant. There are plenty of new use cases being developed, but even if the highest projections pan out it hard to see how the market becomes worth more than a small fraction of the mobile/wearable market.
Microphones may be of more worth; it seems like just about everyone is prepping new voice-only devices that would use microphone arrays of the sort InvenSense introduced at the beginning of May:
Amazon was first in this space, with the Echo, and continues to work hard on it. However, my impression is that Google leads in voice recognition and the artificial intelligence code that would eventually be paired with it. Consequently, what could be more important to InvenSense than these individual products is the opening up of the respective platforms to third-party device makers. As for Apple, we may get some hard detail on what it plans to offer during its developer conference, which runs from June 13-17. The latest rumors, of course indicate that Tim Cook aims to leapfrog the competition, but the company has a lot of catching up to do.
The final ray of hope for INVN shareholders is the eternal prospect of buyout. Current valuation and industry trend makes that more likely than at any time in the past, but I still wouldn't hold my breath, despite renewed media projections on the topic. I won't be surprised if InvenSense is eventually bought buy the likes of Qualcomm or Intel, but good investment theses rely on fundamentals, not hope. Though the non-desktop semiconductor cycle seems like it should start to rebound next year, I remain wary of the overall market. For those who want to stick with this stock, patience is likely to be required.