CSR, which specialises in wi-fi and bluetooth chips, has jumped more than 9% after better than expected results.
The company, which has been lifted recently by news of a legal settlement with US group Broadcom and also by speculative takeover talk, is up another 38.5p to 446p, making it the biggest riser in the FTSE 250.
Full year revenues rose 33% and underlying operating profit tripled to $79m, with fourth quarter figures at the top end of expectations. It forecast continuing revenue growth in 2011, boosted by its new smartphone and automotive products. A key handset from Nokia was slow to go into full production but it has won a key contract from a major smartphone maker for its GPS chip. Vijay Anand at Espirito Santo said:
The new design Tier one smartphone design win is encouraging but CSR's fortunes depend on its success in the smartphone market. With net cash of around 150p [a share], CSR continues to trade at significant discount to the UK semiconductor sector at 7 times 2011 EV/EBITA and remains an attractive proposition, in our view. We maintain buy.
Panmure Gordon's Mark Davis also has a buy recommendation:
The fourth quarter numbers and first quarter outlook are ahead; the maiden dividend was announced last quarter but is positive. CSR has seen a strong performance over the last six weeks on the back of Qualcomm's acquisition of Atheros and the litigation settlement with Broadcom. We believe it remains attractively priced.
