Friday, August 3, 2007

GigaMedia Limited

GigaMedia Limited is a NASDAQ listed security that has been trading in a range between $8.01 and $16.42 over the past year. With 52,732,360 shares outstanding, a recent price of $10.76 gives a total market capitalization of $563,708,906. While there are certainly larger companies, GigaMedia Limited has definitely earned its place in the pack. Last year, GigaMedia Limited created $0.59 in earnings for every share outstanding.

GigaMedia Limited is currently priced by the market at 18.30 times last year’s earnings. Many trading multiples around the world are quite attractive these days, but don’t be fooled. A Price to Earnings ratio of 0 simply means that the security didn’t make any money last year.

With a share price under $50 a share and earnings per share below $1 a share, GigaMedia Limited could be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.