Any Holway followers will know that I put ARM at the pinnacle of UK tech. I have huge admiration for (Sir) Robin Saxby and, more lately, Warren East. I’ve shared many a platform with them both. I have also been an ARM shareholder for some considerable time.
In turn, I’ve lived with year after year of comments saying that ARM is grossly over-valued, that the ‘bubble will burst’, that its competitors (like Qualcomm) will take them out. Even that Intel will get a new lease of life and ‘go eat their lunch’.
All this may indeed happen. But, as in every previous year…not quite yet! Latest Q4 results this morning exceeded all expectations. Revenues were up 19% at £164.2m and profits were up 16% yoy at £80m. For the year ARM made profits of £276.5m (up 20%) on revenues of £576.6m (up 17%). Yep, that’s a 48% profit margin…
What is so wondrous about ARM is that its processors are used in practically every smartphone and tablet. So a little bit of woe at Apple is not really that important to ARM as long as the markets it serves keep growing. Of course, ARM does need to keep ahead of the game. But it has a superb track record of anticipating trends. That’s why its low energy/high performance chips stole a march on Intel in the first place.
And as for ARM as an investment? ARM is up another 4% today, making 21% since 1st Jan 13 and a 56% gain since this time in Jan 12. That’s a near 18x gain in the ten years since Jan 2003. They really don’t come better than that. My only worry is the CGT bill if I sold.