), a manufacturer and provider of complex high-performance
semiconductors and storage systems, has recently announced to
buyback up to $500 million worth of its common stock either in the
open market or through negotiated purchases.
According to the new share repurchase program, the company will
have the discretionary power to repurchase its common stock at any
time depending on the prevailing market condition and other
associated factors. LSI Corp. intends to fund its share repurchases
with its existing cash and short-term investments. Exiting the
second quarter of 2012, the company had cash and short-term
investments of $601.1 million.
This latest share repurchase authorization program will be
coupled with the company's current $750 million buyback program, of
which roughly $75 million remains pending.
The buying back of common shares is likely to be one of the best
strategic moves which will help enhancing investors' confidence in
the company. Management averred that the company is in a good
position to repurchase shares judging by its current performances
and long-term targets.
LSI Corp. has been taking various strategic steps to improve its
business model and transform itself into a storage and networking
company over the past two years. The company's continuing adoption
of newer storage protocols such as SAS and ramp in new entry-level
storage systems may steadily improve its position in the hard drive
Even though LSI Corp. globally established itself, it should be
aware of the tough competition prevalent in the industry. Ominous
rivals of the company include
Mellanox Technologies, Ltd.
Marvell Technology Group Ltd.
) who are exhibiting striking results.
The current Zacks Consensus Estimates for LSI Corp. are 13 cents
and 61 cents for the third quarter of 2012 and for the full year of
2012, respectively. The estimates represent year-over-year growth
of 4.17% for the third quarter of 2012 and 59.21% for 2012.
As the current macro-economic conditions continue to be
challenging; we maintain a 'Neutral' recommendation on LSI Corp.
The stock also bears a Zacks #3 Rank, which translates into a
short-term 'Hold' rating.
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