Analyst Takes Liking to Microsemi's Steady Business

Orange County Business Journal, Oct 13-Oct 19, 2008 by Tolkoff, Sarah

D-Link Devices in Use at UC Irvine; Targus Does Computer Accessories for Apple Crowd

TECHNOLOGY

Irvine's Microsemi Corp., a maker of chips for military and industrial uses, hardly is a glamorous business.

Yet it's seen on Wall Street as a darling during a time of upheaval.

"Microsemi remains our top long-term pick and highest conviction name in an otherwise stormy (ticker) tape," analyst Rick Schafer of Oppenheimer & Co. said in a note to clients.

Microsemi is benefiting from government spending on programs to update and launch the next generation of military satellites, radar, communications devices and weapons, according to the report.

That Microsemi's customers don't sell to consumers is a plus, Schafer said.

"Microsemi's lack of consumer exposure and old school industrial focus affords investors greater visibility and stability," he said.

Microsemi's biggest customers are in the aerospace, defense and medical device industries, which act as "buffer(s) from the current market turbulence," Schafer said.

Chief Executive Jim Peterson isn't shy about Microsemi's success.

The diversity of his customers makes the company "recession resistant," he said. "We are outperforming our peers even in a tougher market."

Of course, the tradeoff for Microsemi is that during good times it doesn't see the big gains of more glamorous chipmakers such as Irvinebased Broadcom Corp.

Analyst Schafer expects Microsemi to beat the S&P 500 index within the next year or so and has a $35 price target on the stock, which was trading at about $20 at recent check.

The stock is roughly flat in the past three months on a recent market value of about $2 billion.

That's better than the some 30% dip seen by its competitors, according to Schafer.

D-Link, UCI Deal

Fountain Valley's D-Link Systems Inc., a unit of Taiwan's D-Link Corp., landed networking gear and surveillance cameras for computer science research at the University of California, Irvine.

D-Link's network switches and cameras are set to be used at UC Irvine's Institute for Genomics and Bioinformatics, which is the analysis of biological topics-such as DNA and the mapping of genes-with advanced computing techniques.

The institute is part of UCI's Donald Bren School of Information and Computer Sciences.

The institute's researchers are using D-Link's surveillance cameras that send data over the Internet so they can track foot traffic and human movement.

The cameras are set to gather data and calculate activity in a six-story building in order to help emergency workers figure out how many people might remain inside after a catastrophic event.

When not in use for research, the cameras are used for building security.

D-Link Systems Chief Executive Stephen Joe graduated from the School of Information and Computer Sciences in 1990.

Targus Does Mac

Anaheim-based Targus Group International Inc. knows geek is chic.

Targus, a maker of laptop cases and backpacks, released a line of sleek accessories for Apple Inc.'s notebook computers.

(Does anyone besides me swoon over Justin Long, star of Apple's commercials?)

Targus asked Apple users what they'd want to see in an accessories lineup.

It turns out it was a lot more than just your typical, white PC-like gear, the company said.

The offering includes mice, cables and a special Bluetooth remote control for doing presentations on a Mac. Prices range from $30 to $80.