Hold it thru next week’s (2/16) quarterly report to see what the forward guidance looks like. A lot of selling has taken place since the company pre-announced this report two weeks ago (http://finance.yahoo.com/news/himax-technologies-inc-pre-announces-111000292.html), so we may see some rebound if the complete report also includes some good news not included in the pre-announcement. It is not unusual for small-cap tech stocks domiciled in Asia to experience wide price swings, and in this case I think HIMX is caught in a downdraft that will eventually reverse.

Hi Hector. I ran that name by Joe, and he took a look at it for me. He feels the product seems viable but the balance sheet is suspect (i.e., would prefer to see it have more cash and less debt). Also, if the new drug was going to be a blockbuster instead of a good med for a select group of patients that would be a good reason to own the stock, but the new drug appears to be just an inhaled version of an old drug so its not clear how much more market opportunity it will open up. In short, we don’t see a compelling reason to buy that stock now, especially with so much uncertainty as to what the ACA replacement will be. I hope that helps.

If your shares are held at a broker, then you don’t need to do anything since the Transfer Agent will handle all of that directly with your broker. For example, I hold shares of Xerox in one of my brokerage accounts, so when it spun off Conduent last month the new shares showed up in my account without me having to do a thing. If there is cash involved in the deal, that too will be sent to your brokerage account automatically. The only time its a problem if you hold the shares yourself in certificate form (which I do not recommend), in which case you would need to contact the Transfer Agent to submit the shares for conversion (which can be a huge pain in the you know what, especially if the name on the certificate is not a perfect match to your legal name).

Despite the recent drop and recovery in HIMX, our thesis for owning it hasn’t changed so neither has our long term outlook on it. We believe HIMX is likely to be acquired later this year at a price independent of its current share price, so what happens between now and then is immaterial in that regard. There is technical resistance around $8.50, so my guess is it will flatten out there in the near term.

I don’t expect HIMX to drop back to $5 again, since those shareholders are no longer in the stock. My expectation is that it will trade in a fairly narrow range of $6.50 – 7.50 until we get closer to the next earnings report. After that, I think it will rise on speculation over a potential buyout offer materializing during the third quarter.

That’s a promo for Himax (HIMX): https://www.investingdaily.com/res/reports/term1y/BTP-Three_Hot_Stocks_for_the_$150_Billion_Virtual_Reality_Revolution.pdf

As a publisher we are prohibited from giving personalized advice, so I cannot tell you which one you should buy. We recommend three of them in the same space because that sector is particularly volatile, and there is no way of knowing which company’s I.P. will eventually turn out to be the most valuable. That said, of the three I think HIMX is the most likely to be acquired this year, so investors with a short term time horizon might want to focus on it.