Reinhart Partners LLC Increases Stake in Silicon Motion Technology Co. (NASDAQ:SIMO)

Reinhart Partners LLC has significantly increased its investment in Silicon Motion Technology Co. (NASDAQ:SIMO - Free Report) during the third quarter of this year. According to the firm’s latest report filed with the Securities and Exchange Commission, Reinhart Partners raised its holdings by 43.3%, now owning a total of 1,080,375 shares. This increase comes after the investment fund purchased an additional 326,358 shares during the quarter.

This significant acquisition of Silicon Motion Technology has resulted in the semiconductor producer representing approximately 2.5% of Reinhart Partners LLC's total investment portfolio, making it the 16th largest investment within the firm. At the end of the latest quarter, Reinhart Partners LLC held a stake in Silicon Motion worth roughly $65,622,000, which translates to about 3.21% of the total shares.

Institutional Investors' Actions

Reinhart Partners is not alone in increasing its stake in Silicon Motion Technology, as several other institutional investors have also made moves regarding their investments in the company. For instance, Blue Trust Inc. dramatically enhanced its position, increasing its ownership by an astonishing 3,971.4% during the second quarter, bringing its total to 570 shares valued at around $44,000 after acquiring an additional 556 shares.

Headlands Technologies LLC has also taken an interest, purchasing a new position in the second quarter worth $139,000. Similarly, LRI Investments LLC made its debut in the first quarter with a new investment worth $150,000.

Additionally, PNC Financial Services Group Inc. raised its stake in the fourth quarter by 48.1%, acquiring 2,527 shares valued at around $155,000, following an added 821 shares. In another move, HBK Sorce Advisory LLC entered the market by buying a new position worth $204,000 in the first quarter. Overall, hedge funds and other institutional investors currently own approximately 78.02% of Silicon Motion Technology's shares.

Analyst Ratings Adjustments

The company has been the subject of various changes in analyst ratings recently. Roth Mkm lowered its target price from $90.00 to $80.00 while maintaining a "buy" rating on the stock. In a report dated October 2nd, Wedbush reiterated an "outperform" rating and set a target price of $90.00. B. Riley also adjusted its outlook, reducing its target from $112.00 to $95.00 with a "buy" rating as of August 5th.

Conversely, Bank of America downgraded its rating from "buy" to "underperform," decreasing its target price from $90.00 to $60.00 on August 16th. Meanwhile, Morgan Stanley adjusted its target from $78.00 to $65.00 while designating a rating of "overweight" on September 16th. Presently, one analyst has assigned a sell rating, while nine have given a buy rating. According to MarketBeat, the consensus recommendation stands at "Moderate Buy," with a price target averaging $86.11.

Current Stock Performance

As of Friday, Silicon Motion Technology Co.’s stock traded at $59.93, with the company having a market capitalization of $2.02 billion. The stock features a price-to-earnings ratio of 34.05 and a PEG ratio of 0.96, with a beta of 0.83. The 50-day and 200-day moving averages stand at $60.28 and $71.62, respectively. Over the past twelve months, the stock has seen a low of $51.85 and a high of $85.87.

Recent Earnings Announcement

On August 2nd, Silicon Motion Technology released its quarterly earnings data, reporting $0.96 earnings per share, just slightly surpassing analysts' expectations of $0.95 by $0.01. The company reported revenues of $210.67 million for the quarter, exceeding estimates of $206.75 million. Additionally, Silicon Motion revealed a return on equity of 10.31% and a net profit margin of 10.14%. The company experienced a remarkable revenue increase of 50.1% compared to the previous year’s same quarter. Last year in the quarter, they reported earnings of $0.33 per share. Analysts are forecasting that Silicon Motion Technology will post earnings of 2.8 per share for the current fiscal year.

Dividend Declaration

In addition to earnings, Silicon Motion Technology announced a quarterly dividend that was disbursed on August 22nd. Shareholders of record as of August 8th received a dividend of $0.50. The ex-dividend date for this distribution was also August 8th. This dividend signifies an annualized payout of $2.00, yielding 3.34%. However, the company’s current dividend payout ratio is notably high at 113.07%.

Company Profile

Silicon Motion Technology Corporation, along with its subsidiaries, specializes in the design, development, and marketing of NAND flash controllers used in solid-state storage devices. Their product offerings include controllers for solid-state drives (SSDs) aimed at consumer and enterprise markets, mobile embedded storage solutions for smartphones and IoT devices, and flash memory options for storage expansion purposes, among others.

Reinhart, Investment, Shares