Description: u-blox Holding AG is a Swiss-based semiconductor provider engaged in the development, manufacture and marketing of global positioning system (GPS) products and services. It offers a range of GPS positioning products including GPS receiver chipsets, GPS receiver modules, GPS receiver boards, GPS smart antennas and GPS antennas, which are used for navigation, automatically locating vehicles, security, traffic control, location based services, timing and surveying.
u-blox operates in two segments: GPS/Wireless products, which develops and sells embedded GPS receivers and wireless modules; and Wireless services, which is engaged in the provision of wireless communication technology services in terms of reference designs and software. Its business is also know under the term: Internet Of Things.
Investment case:
u-blox is a provider of key positioning products and wireless communication solutions for the industrial, automotive and consumer markets. The company is uniquely poised to play a key role in the developing wireless communication services market; apart from its traditional positioning and locating technologies, its newly developed wireless technologies for the and labeling of items offer exciting new areas of application.
The complete range of potential product applications for u-blox’s offerings is vast and unimaginable, but at present the key growth drivers are: a) the automotive and transport industries, and b) machine-to-machine (M2M) networking. In the automative arena, u-blox’s GPS products are employed to locate stolen cars, analyse vehicle usage, improve fleet management, as well as automate tool payments. In the M2M networking area, u-blox’s products are employed in intelligent smart metering in the power market, in managed services for hospital and homes for the aged, and in the networking of POS-terminals.
At present, u-blox shares are trading with a P/E of 29 times, and 24 for the 2015 financial year; this is more or less in line with its broader market valuation. Given the potential of the technology and current annual sales growth of 18%, u-blox is not yet overpriced.
Strengths and weaknesses analysis / Fundamental analysis:
Strengths:
- u-blox has developed a key technology for the wireless communication market,
- A broad range of applications should be possible,
- High demand can be expected from the car industry.
Weaknesses:
- u-blox’s technology is mostly based on NFC technology (analog),
- The company’s technology and products are yet to be fully applied in the market,
- The future growth of the company is highly dependent on consumer sentiment.
Company profile, investment opportunity and asset management integration:
| Metric | Rating |
| Operational risks: | Above Average |
| Expected growth: | Excellent |
| Long term value creation: | Above average |
| Positive competitive advantage: | Above average |
| Management excellence: | Average |
| Financial strength: | Average |
| Investment orientation: | Group “Best-in-Class”: Industrials, Technology, Car Industr |
Price ranges:
| Buy: | Only forcustomers |
| Sell | Only forcustomers |
| Stop-loss: | Only forcustomers |
| Fair-value: | Only forcustomers |