Friday, February 27, 2015

ARM Takes Its Chip Business Beyond Phones - WSJ

ARM Takes Its Chip Business Beyond Phones - WSJ:
ARM Holdings, $ARMH, is one of the great intellectual property engines of our time. They make the chips used in cell phones and other computing devices. Or, stated more accurately, they invent the chips, and then license out the manufacturing, sales and distribution of them.
One thing that has made them such a dominant force is low power use technologies, exactly the kinds of things you need for mobile technologies.
When you look at the financials of ARMH, don't be deceived and compare them directly with a company like Intel or AMD. ARM has a price-to-earnings (P/E) ratio of 60 to 70; Intel has a PE of only 14 to 16. Intel has the $ billion factories. ARM has only the development labs for inventing stuff.
And, speaking of stuff; ARM is now setting their sights on the-internet-of-stuff. Billions of new items will be connected to the internet each year. Appliances, pet monitors, and more...
Let's see how that evolves.
In the mean time, keep your eyes on this company that utilizes IP better than pretty much any other. It gets is reviews in the form of royalty payments wired to the bank. Nearly pure profit.
It's a beautiful thing.
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