Another research report is actually out in support of Spreadtrum Communications Inc. (NASDAQ: SPRD). Yesterday came a report from short seller Muddy Waters questioning some accounting issues from back years on top of the recent weakness we have seen from anything in China. A denial of the problems, a declaration of a dividend, and a new positive research report are all driving shares higher today.
Spreadtrum said that the Muddy Waters concerns are baseless and the company also approved a quarterly cash dividend of US$0.05 per American Depositary Share or approximately US$0.0167 per Ordinary Share. It is worth noting that Jefferies just yesterday threw a BUY rating with a $19.25 price target on Spreadtrum.
Zacks noted today that Spreadtrum (SPRD) fit within its strong buy ratings with sales momentum… That criteria was based having the Zacks #1 Rank, a market capitalization above $500 million, consensus revenue estimates rising at least 1% for both 2011 and 2012, and a positive revenue surprise in the most recently reported quarter. Zacks’ research report can be found here but Zacks did note the possible inventory issues.
Spreadtrum is trading up 10.5% at $13.81 on more than 8 million shares and the 52-week trading range is $7.60 to $24.20.
If the analysts are right and if there are no inventory and/or accounting issues, then the consensus has Spreadtrum trading at less than 2-times sales and with a P/E ratio of well under 10…
JON C. OGG
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