Metalink (MTLK) the acquisition target

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.

Low risk entry point for Metalink (MTLK)

I mentioned that MTLK is coming into strong support and, despite my bearish outlook, I'm looking to buy.

I like to use Tom O'Brien's methods as well as Tom DeMark's. I especially like it when they both line up together. MTLK is coming into a TDST support line, which matches up nicely with a Tom O'Brien swing point. Check out the charts.

Metalink (MTLK): Best-of-breed in the wireless chip sector

Metalink always describes itself as the "best-of-breed" in the wireless networking chip sector and if you would like some evidence for that claim just read the article below. This is pretty cool stuff. Here is the link.

Metalink Ltd. (NASDAQ: MTLK), a provider of high-performance wireless and wireline broadband communication silicon solutions, announced that its WLANPlus(TM) chipset has achieved impressive performance results in independent tests conducted by The Tolly Group. These rigorous tests benchmarked Metalink's WLANPlus against three products using different 802.11n chipsets. The tests confirmed that the use of Metalink's solution doubled performance as compared to the closest competitor tested, and in many of the tests by as much as ten-fold. These tests further position WLANPlus as the best-of-breed 802.11n draft 2.0 compliant product and the only one powerful enough to enable high-performance wireless applications.

Kevin Tolly, the CEO of The Tolly Group, noted: "To 'push the limits' of these chipsets, we introduced a new set of challenging criteria, including zero-loss tests as a necessary de-facto standard for the home entertainment space. We were impressed with Metalink's WLANPlus, which clearly outperformed the others in both the 2.4-GHz and 5-GHz bands, as well as being the only chipset tested to achieve zero-loss in UDP tests." Tolly added that the tests indicated that Metalink's product also achieved the best results in TCP tests.

The Tolly Group's tests took place in a large U.S.-based home (a 6,000-square foot, three-floor structure with a basement), enabling a wide variety of performance tests. The tests included measurement of throughput, full home coverage and transmission quality. These tests demonstrated that WLANPlus offers superior performance in the 2.4-GHz band (the band commonly used for data services), and that it is the only chipset tested which provides robust performance in the 5-GHz band (used for high-quality applications such as video and gaming). As such, WLANPlus has emerged as the clear best-of-breed foundation for 802.11n home networks with a proven ability to support the delivery of multiple simultaneous HD video streams throughout the home.

"The fact that the Tolly Group's independent tests have singled out Metalink's technology confirms WLANPlus's status as the market's highest-performing solution for wireless home networks," said Barry Volinskey, Metalink's Vice President of Marketing. "Our product achieved the best results in both TCP and UDP tests, as well as in the 2.4-GHz and 5-GHz bands, making it the only wireless technology capable of supporting the new demanding requirements of wireless home networks. This further establishes Metalink's positioning as a major player in the fast-growing home networking space."

Metalink gets the ball rolling

The announcements that I've been waiting for are here!!!

Expect revenue in the 4th quarter and massive growth next year!!!

Metalink (MTLK) Announcements

I'm down in Chapel Hill to attend my fiancee's Ph.D. thesis defense and help her move up to Chicago with me. Finally. (The little guy in the picture is Ethan, my nephew.)

While I'm away, I wanted to post some of the recent developments with Metalink.

MTLK WLANPlus wins Wi-Fi Alliance certification

Metalink Earns 802.11n Wi-Fi CERTIFIED Status

Metalink Makes An Announcement of Phenomenal Significance

Metalink Inc. (MTLK)

"...we were happy to have publicly announced the alliance with STMicro and Samsung, I'm pleased to report that we currently have similar alliances in the works that we cannot announce publicly."

This is a quote from the Q1 conference call of Metalink Inc. If you didn't know, last month MTLK announced a stratigic alliance with STMicroelectronics and Samsung to provides its chips for their HD IPTV boxes. These boxes will be in everyone's home in the near future. Most importantly, they will be in many of the homes in China.

Interestingly, another leader in this area, Sigma Designs has recently been downgraded by a few analysts due to increased competition from other companies in China. STMicro was explicitly mentioned. I'm very interested to find out what MTLK has in store for us.

Here is a list of some links regarding MTLK.

MTLK Press releases
Shlomi Cohen article on Seeking Alpha
Shlomo Greenberg article on Seeking Alpha
Sigma Designs Downgrade

Ok, this wouldn't be complete without a chart. Oh, and by the way, I own MTLK.

On a final note, don't expect MTLK to start ramping up revenues until late this year.

Finally...a winner

I mentioned that I've been having a hard time with this choppy market and that the only thing that has been doing well for me are the gold stocks.

I own a small stake in ANO, which has been gang-busters recently. But other than that, my other gold stocks have been hovering around their lows. That changed today when US Gold Corp (UXG) announced a favorable exploration result. The stock is up 23% right now. I also own Great Basin (GBN), which is up a nice 5% today. I was getting worried because it seemed like most of the gold stocks had already taken off.

Now if Tanzanian Royalty Expl. (TRE) can wake up, I'll really be happy.

On another note, I'm still waiting for the pullback in MTLK so I can buy. No luck so far.

Metalink Ltd. (MTLK): My portfolio's messiah?

As SIMO continues to rocket higher, mocking me along the way, I'm left with finding another winner that I can stick with, through thick and thin (not too thin of course).

A similar situation took place last summer when Sigma Designs (SIGM) broke out and never looked back. I waited and waited for a pullback but it just never came. It was easier to get over this one because I never actually owned it.

What attracted me to SIGM was its position in IPTV (Internet Protocol TV). It makes chip sets that bring content over the internet to the home. Eventually everyone will have a IPTV box on their HDTV that will bring video on demand, internet, and communications to every room in the home. Very exciting, especially since the fiber optic infrastructure is already in place for the explosion in bandwidth that will be required for the technology to work.

I keep up with SIGM and found this article today about a small Israeli company and a huge deal it just announced with Samsung and STMicroelectronics. Metalink Ltd makes similar chips but better and at a lower cost.

Metalink joins the big league

I suggest you check it out. Also, look at the company's website.

Here are my charts for the company. I don't think it will rocket up like SIGM did, mainly because of the large overhead resistance that exists (check out the date of the IPO). I think there is some serious upside to MTLK and should be added on dips.