Thursday, December 31, 2009



In August, I was visiting our office in Bristol England and picked up a copy of Investor’s Chronicle Magazine. In that issue from the publishers of the Financial Times I ran across a few decent companies.

After getting home and doing lots of homework, I really liked ARMH. Unlike AMD or INTC or Broadcom, they do not have the huge cost of building chip factories. They actually design and test chip blueprints and then license them out to chip makers or component manufactures. These leases are extremely profitable and the brain trust at ARM have come up with some amazing designs.

ARM’s dominant market are for cell phones which is exploding. On any smart phone, you can have about 6 ARM micro processors on board. AMD and INTC are fighting hard to be the leaders in the mobile market. ARMH will either be an acquisition target, or a provider to other chip makers. I like the prospect for both.

ARMH is about 4.3% of the Salve Lurcum Portfolio and is up 17%. Ironically the base stock in the UK is only up 9% over the same period of time. As an ADR it’s a little trickier establishing the value and forward looking price. I am looking for about 12 dollars a share for this ADR by mid 2010.


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