High definition media is not going away. In fact, it is advancing beyond what anyone could have imagined. One of the stocks to buy in this industry is called Silicon Image Inc. They trade under the stock symbol SIMG on the NASDAQ exchange.
This is a company that has a great potential future, but is currently struggling to become profitable. Knowing how to invest in stocks, especially in technology, is knowing when to actually jump in and buy. This is one of those cases where it is debatable on whether this company will be able to leverage this growth market.
In 2009, they lost around $130 million. That is a significant sum considering their total revenue was $150 million. They had a negative net profit margin of 75 percent.
In 2010, they did a little better. Their sales rose to $190 million, but made only $8.1 million in net income. They must continue to improve on these figures if they want to make it in this highly competitive industry.
If you do some digging and realize that they have technology that will make them very competitive in the long run. If they are, this is a very big growth market and they might be a good stock to buy now.
They have been fairly wise in their financial management. Their current ratio and quick ratio is fairly good. That means they have the cash to pay their bills on time. Their current ratio is sitting at 4.63, which the average semiconductor company has a ratio of 2.25
They have been managing their debts fairly well as well. They have a low debt to equity ratio. It has been consistent at .31 for the past two years. The industry average here is 1.50. They are also earned money on the money borrowed, which is a good trend to have.
Before buying or selling options, and before choosing the right