While everyone waits for the Fed, here is an interesting little piece from Shlomi Cohen. He says he is selling his Sigma Designs (SIGM) shares because he expects a big correction and thinks that Sigma will start making some acquisitions. He also thinks they will go after Metalink (MTLK) and I tend to agree with him.
Here is a little bit from his article:
I find it difficult to envisage Sigma maintaining the rate of sales and earnings growth of the last few quarters next year. If there is a slowdown in growth, the stock will undergo a severe correction, and I will get another opportunity to re-enter it. The gorillas are unlikely to allow Sigma to remain almost on its own in the burgeoning IPTV market for much longer, and on the other hand, there is still no strong growth in its other line of business, DVD players using the new Blu-ray disc format.
Last Thursday, Sigma announced that it would be calling a shareholder's meeting to approve an increase in the quantity of registered shares to 100 million. This would appear to imply that a stock split will be announced, but it could also be a preliminary move ahead of an acquisition of a company for shares, a move that is quite logical considering the valuable currency it currently has - a share priced at $70. If there is a field that I feel would be a logical one for Sigma to move into in order to diversify its product range, it is WiFi chips, and here I would advise it to take a look at Metalink Ltd. (Nasdaq: MTLK;TASE: MTLK) as an interesting acquisition target.