04-05-2016, 03:16 AM
We never got around explaining why we bought Ambarella (AMBA) last week, and now we don't have to as there is a good article:
There’s a small cap tech marvel that is participating in some of the most radically innovate themes moving technology forward that has been crushed by the market. The stock has dropped from just below $130 in July, to $35 and has recently bounced back to $45 on big news. But here’s the secret: Wall Street has overreacted and thrown the baby out with the bathwater.
Capital Market Laboratories — The Secret's Out: This Tech Marvel is Winning
The whole article is very readable. Basically the headwind is a one-off (problems at its biggest customer, GoPro), but the underlying growth for its product is structural, until a serious competitor emerges.