Thursday, October 26, 2006

LSI Logic Finally Delivers!

LSI Logic (symbol: LSI), an integrated circuit and data storage chip designer, is the only individual stock I own in my non-IRA portfolio. LSI, like all semiconductor stocks, is extremely volatile and has stretches of time where it has risen or fallen by 30% in a 2-3 month time span.

I accumulated my LSI position over a period of 2 years, buying shares periodically on dips between October 2002 and July 2004. My average cost basis is $6/share and I have been waiting for LSI to break above $12 so that I can sell my shares and realize a 100+% gain.

LSI closed at $8 on the last trading day in December 2005. It rose to $11.81 on March 31st, but has floundered since then, dropping down below $8, with its lowest close occurring on August 25th, when it closed at $7.46/share.

LSI reported its earnings for its 3rd fiscal quarter yesterday. I expected them to be lackluster, but I was pleasantly surprised. The Street was expecting earnings of 12 cents per share, and LSI reported non-GAAP earnings of 16 cents per share. LSI also provided decent guidance for the upcoming quarter. Wall Street took notice and has bid LSI higher by about 16% today, up to $9.69/share.

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