PSEM Investment Analysis Report & Stock Research, Pericom SemiConductor Corp.

PSEM Revenue

Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, PSEM the high and low end of the Price to Sales per share ratios are 4.55x and 2.25x respectively.

Notice that PSEM's current Price to Sales per share ratio is 1.24x, which is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of $9.73, PSEM is 64% below where we would expect to see it. This will beneficially factor into our final analysis of PSEM as it is not often that this stock sinks to these levels.

PSEM Cash Earnings

Looking at PSEM specifically in their Cash Earnings capabilities, Ockham views PSEM as significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for PSEM, the current level of Cash Earnings compared to its historical levels helps identify where PSEM is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 42.07 and a historical low Cash Earnings per share ratio of 23.25, an investor can relate where value becomes optimal.

So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for PSEM? From the Ockham perspective, we are looking specifically at PSEM to see if the market is recognizing the huge disparity between PSEM's past stock price to Cash Earnings ratio to today's levels. At a difference of 37% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at PSEM. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.

PSEM Dividends

A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company's inherent expectations. As of the time of this report, our data provider does not have historical data for PSEM. Therefore, we are not utilizing the dividends portion in our study. So, we do not know whether PSEM currently pays a dividend at present or not, we have an "expected dividend" payment listed in key fundamentals but cannot varify it.