Friday January 02, 2009
"My top stock for 2009 is EZChip (NASDAQ: EZCH)," says technology expert Paul McWilliams in Next Inning. Indeed, the leading advisor believes the chip stock could double in 2009.
"I came as close as I've ever come to 'pounding the table' when suggesting that Next Inning readers buy EZCH when the stock was trading in the $6's and continue to believe the stock provides a very attractive balance between risk and potentially high rewards from its current price in the mid-$11's.
"EZCH has captured designs at tier one and tier two networking companies with its innovative and highly pipelined network processor (NPU) and I believe is set to do the same with its soon-to-be- released NPU aimed at the access markets.
"These design wins have been several years in the making and the products, which include the wildly successful Juniper (JNPR) MX series of routers and are just now building momentum.
"In addition to being used in the JNPR MX series, which is the fastest growing product line in the history of the company, I believe Cisco has designed in the new EZCH NP-3C in its highly promoted ASR9000.
"EZCH flipped from an operating loss to an operating profit in Q3 2007 and has since grown its pro forma operating profit margin to 22.7%.
"My forecast suggests we should expect a pro forma EPS in 2009 that is comfortably above $1.00 per fully diluted share and that the company may end 2009 reporting a gross profit margin approaching 80%.
"With what I view as a solid potential to grow revenues and profits for years to come and $1.90 in net cash per outstanding share, I think EZCH has the potential to double during the next twelve months."
