This column is for investors willing to take more risk and potentially receive more reward.  The stocks mentioned in this column are not recommended to buy or sell.  They're brought to your attention so you can investigate them further to determine if they fit your risk profile.  Most of the stocks will have less than $1 billion of market capitalization, have more volatility than other stocks, and oftentimes no earnings.  And some will have tremendous stories.

April 15, 2010 - Cirrus Logic, Inc. (CRUS-NASDAQ) develops high-precision analog and mixed-signal integrated circuits(ICs). The company offers analog and mixed-signal audio converter and audio digital signal processor (DSP) products which include analog-to-digital converters (ADCs); digital-to-analog converters (DACs); chips for integrating ADCs and DACs into an IC; digital interface ICs; volume controls; and digital amplifiers, as well as audio DSPs for consumer electronics applications such as A/V receivers, digital TVs, and CobraNet ICs and modules for networked audio applications.

The company also provides high-precision analog and mixed-signal ICs for energy control, energy measurement, and energy exploration applications; ICs, board-level modules, and hybrids for high-power PWM and power amplifier applications under the 'ApexPrecision Power' brand name; proprietary products, which include ADCs, DACs, linear amplifiers, PWM amplifiers, successive approximation register converters, and amplifier ICs; and system reference designs.

It has operations in the United States, the People's Republic of China, the European Union, Hong Kong, Japan, South Korea, Taiwan, and the United Kingdom. The company sells through domestic salesforce, external sales representatives, and distributors. Cirrus Logic,Inc. was founded in 1984 and is headquartered in Austin, Texas.

At the moment, all cylinders are firing. During the fiscal third quarter (ended December 26th, fiscal year ends in March), sales jumped by 49% compared to the same period in 2008. Earnings per share more than doubled, going to 19 cents a share vs. 7 cents. The higher numbers came mostely from the portable audio segment, but contributions also came from industrial business. Audio products were up 82% in sales compared to the third period of 2008. Other segments, like Energy Products, were unchanged compared to the prior year's quarter but did rise by 26% compared to the second quarter's totals.

Analysts see CRUS finishing the full year with strength. Estimates for revenues are $217 million, up 24.3% from the $174.6 million in 2008. For 2010, the consensus from 6 analysts is for $259.48 million, up 19.6%.

For earnings, the consensus for 2009 is 43 cents, well above the 27 cents in 2008. For 2010, they're forecasting 68 cents, a 58% improvement. Next quarterly (and annual) earnings will be on April 27. Look for 14 cents for the final quarter compared to a negative 1 cent in the last period in 2008.

The future looks bright for CRUS, based on higher demand in its wider margined products. Expect Audio Products to continue to drive the better sales and earnings. A faster recovery of the general economy would help even further as consumers become more confident and spend more on electronics and leisure time products.

More numbers: Price to Sales ratio is 3.26. Price to book is 3.20. Book value is $2.98. Operating margin for the last 12 months was 4.89. Profit margin was 5.35%. Return on equity was 5.47%. Return on assets was 2.54%. There's $102.47 million in cash or $1.56 per share. There is no debt. Current ratio is 4.06. In the last year, the stock is up 153%. There are 65.47 million shares outstanding with a Float of 61.10 million. Insiders own 1.37% while Institutions have 77.90%. There is no dividend.

Aggressive investors will like this story. As the semiconductor industry is very cyclical, it seems like the up cycle has started, and Cirrus is riding the wave. If the global economy recovers, more of the device carrying its chips will sell, and all the above estimates will have to go higher as sales ramp even more, margins widen, and earnings improve.

- Company Web site: www.cirrus.com

- Ted Allrich