Don’t Miss the Incredible Return Potential of Cirrus Logic, Inc. (CRUS)

Over the past year, the shares of Cirrus Logic have traded as high as $45.49 last September and as low as $20.28 last April.  You will notice that the share price in this stock since September has acted much like the share price of Apple, its largest customer.  The reason is, quite simply that Cirrus generates about 90% of its sales to Apple.  First, I believe, as Mark Twain said about himself, that the rumors of Apple’s death are greatly exaggerated.  Also, I don’t think the emotionally driven shareholders who have recently sold their positions really took the time to see if Cirrus’ management was taking any effective action to reduce their only hope for survival upon Apple’s continued business.  They have and the initial results are encouraging as they are adding new customers.

Also, Apple’s business is not going away as Cirrus provides critical components for its products and is a top tier supplier that could not be easily replaced.  The reduction of Apple’s percentage of Cirrus’ business will not come as a reduction of sales to Apple, it will come as a result of Cirrus aggressively and successfully marketing its products to new customers and expanding their overall sales.  Once the average investor catches on, demand for these shares will rise and the price will return to a much more appropriate valuation based upon the real fundamentals of the business.

The article Don’t Miss the Incredible Return Potential of Cirrus Logic originally appeared on Fool.com and is written by Ken McGaha.

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