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Is Cirrus Logic, Inc. (CRUS) Still a Great Investment?

The burned hand learns best
Apple may have already learned its lesson from the iPad Mini mispricing brouhaha, as analysts seem fairly confident we’ll see the next iPhone offered at a much lower price to woo smartphone users back. I don’t think we’ll watch Apple follow Nokia Corporation (ADR) (NYSE:NOK) down the path of offering cut-rate phones to stem customer losses, but we’ll likely see some sort of discount, which is all well and good for Cirrus Logic. Because its fortunes are so intimately entwined in those of Apple, upon the latter’s resurrection, we’ll see the chip maker rise spectacularly again, too.

Yet it also leads one to wonder why, if Apple is essentially buying up every last bit of product Cirrus Logic is churning out, it doesn’t just buy the company outright? It has almost $40 billion in cash and equivalents (excluding long-term investments) sitting in the bank and the chip maker’s market cap is just over $1.6 billion. It could offer investors a pretty premium and not even break a sweat. In the end, either scenario works out well for investors.

Cirrus Logic is not a broken company, and that represents opportunity for investors.

The article Is Cirrus Logic Still a Great Investment? originally appeared on and is written by Rich Duprey.

Fool contributor Rich Duprey owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple, Cirrus Logic, and TriQuint Semiconductor.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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