Since the downtrend in Himax Technologies’ (NASDAQ: HIMX) stock began in December, the stock is on the verge of finding support at between $7.50 and $8.00 a share. Though shares closed below $8.00 for the week ended March 9, the selling pressure may soon end as Himax ramps up production of large panel display drivers and components for 3D scanning.
Valuations are unfavorable for HIMX stock at the moment. At a P/E of close to 50 times, only a forward P/E of 16 times will keep value investors interested in the stock. Within the next six months, Himax will pay its annual dividend, which currently yields around 3%. Investors with a timeframe of at least 18 – 36 months should do well accumulating Himax at present levels.
Investing in Himax, though, is a waiting game. The sale of 3D sensors, in partnership with Qualcomm (NASDAQ: QCOM) will happen later this year. The companies probably secured a multi-year supply deal with China-based phone suppliers. This will guarantee volume sales once the product is ready. But Himax and Qualcomm still need more North American customers. That may happen after companies realize how big the 3D technology will become. In the meantime, the company still has AR (augmented reality) and to a lesser degree, VR (virtual reality) to offset slowing sales of its legacy products.
