Through TheFLY's Eyes: Fairchild Semiconductor

from Theflyonthewall.com









Old Stock Quietly Changing Its Stripes

The Fairchild Semiconductor (FCS) name has a storied history in Silicon Valley and Wall Street. The company became a stand-alone business about a decade ago again when it was spun off from National Semiconductor. For most of this time, Fairchild has been a commodity-focused semiconductor company that was an excellent free cash flow generator but had a tough time growing revenues organically.

Last year, Fairchild's long-time head retired and the board brought in a new head from Tyco's semi business. On June 28th, the company will host an analyst day to review its new path. The company is expected to say it is moving away from its acquisition strategy and will focus more on R&D and new products. In the past, price erosion on many of its products was so great that it had a tough time growing revenue without acquisitions.

Those days are supposedly gone. Now higher-end products with improved margins are the goals. This stock has been forgotten by many due to its revenue growth difficulties. It is time to start following this stock again and see if new management can spend their R&D dollars wisely and get some serious revenue and earnings growth back.