Topic: How To Invest

Hi, Pat: Could I please have your view on Super Micro Computer? What about the fact that it seems to be in the limelight lately? I know you advise staying out of stocks like that. Thank you.

Article Excerpt

Super Micro Computer, $33.30, symbol SMCI on Nasdaq (Shares outstanding: 46.5 million; Market cap: $1.6 billion; www.supermicro.com), makes servers and server components. The company posted sharply higher results in the latest quarter: in the three months ended December 31, 2014, its revenue rose 41.2%, to $503.0 million from $356.4 million a year earlier. Excluding one-time items, earnings per share jumped 85.7%, to $0.65 from $0.35, beating the consensus estimate of $0.47. The company continues to gain market share, and it’s expanding successfully into products for cloud computing. Super Micro was in the news after reporting its strong results—but the limelight entails far broader coverage from brokers and the media than what the company received. Current examples of in-the-limelight stocks include high-profile companies like Facebook, Tesla, Netflix and so on. Super Micro is in a highly competitive industry, but it has a strong relationship with Intel, which lets it be among the first to offer products using Intel’s latest chips. This collaboration is paying…