Tough month for my core holding EZchip

It has been a long slog – and the summer has been particularly difficult.

EZchip Semiconductor (NASDAQ: EZCH) is my largest holding. Cisco Systems (NASDAQ: CSCO) announced a new chip, which prompted investors who are shorting EZchip to say the move would knock the company out of the box. The stock took a hit. It took 10 days for CSCO to publish details about their new chip, but on the conference call Cisco specifically said that EZCH processors would work along side the CSCO chips.

The stock was trading in the low 30’s. Shorts and worried investors sold it down to the low 20’s and the price has only recovered to the mid-20’s as of October 4, 2013.

I found this all extremely painful because in my opinion EZCH is starting to receive increased revenues from their new NP-4 processor.

I will write a new report and update the status of other companies in the Undervalued Growth Companies portfolio.

I analyze the portfolio daily with the philosophy that I will liquidate stocks as they move higher and buy more shares of lower priced stocks. So far, those opportunities have been few and far between, but as with all markets those opportunities will come back.

The investments discussed are held in client accounts as of September 30, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.

Author profile

Gerald Gehman
Gerald Gehman
Gehman Capital Solutions, Ltd. is an investment management company based in New York City. Gerald P. Gehman founded the company to search for, and buy securities at prices significantly below their long term valuation level.