Rambus: In the Chips

02/08/2017 7:00 am EST

Focus: STOCKS

David Fried

Editor, The Buyback Letter

Our Buyback Premium Portfolio is beating the S&P 500 by more than 97% since its inception in August of 2000; this portfolio is up 153.50% since inception vs. a gain of 55.69% in the S&P 500 over the same time frame, explains David Fried, editor of The Buyback Letter.

Sunnyvale, Calif.-based Rambus Inc. (RMBS) designs, develops, and licenses cutting-edge chip interface technologies and architectures that are used in digital electronics products.
Its products are integrated into tens of billions of devices and systems, powering and securing diverse applications including Big Data, Internet of Things (IoT), mobile, consumer and media platforms.

Rambus recently signed a five-year patent license agreement with Winbond Electronics Corp. a worldwide leading supplier of specialty memory, to cover the use of Rambus patented memory solutions for Winbond products through 2021.

It also renewed a license agreement with Thales e-Security to protect Thales hardware security modules against side-channel attacks. Licensing agreements are a recurring revenue source for Rambus, the result of successful monetizing of its patents.

Rambus’ patented technologies are of great importance to chipmakers for manufacturing advanced chips used in computers and electronic goods.

Rambus seems poised to capitalize on the rising popularity of energy-efficient lighting and LED products in the latest architectural, retail, commercial and residential lighting fixtures.

Q3 had better-than-anticipated results, with adjusted earnings of 16 cents per share (above analysts’ estimates of 13 cents). Revenue hit $89.9 million (22% over the year before), due to higher revenue from sales of memory products and security tech development projects.

For the fourth quarter the semiconductor and IP products maker predicts earnings of 14-18 cents on revenue of $94-$98 million.

Rambus, which went public in 1997, instituted a stock repurchase program in 2001. The company prefers buybacks over dividends and has repurchased about 5.21% of its shares in the past 12 months.

Subscribe to David Fried's The Buyback Letter here…

Related Articles on STOCKS