SiRF's Up: Selloff Looks Overdone

I sold my shares of SIRF back in February when the stock broke above $30. I have traded SIRF on and off over the last few years, and have always made money selling it above $30 and buying it back in the $20s.

I still firmly believe in the fundamental story at the company. SIRF is benefitting from the GPS wave of personal navigation devices (PNDs), and riding the growth of Garmin, Magellan, TomTom, etc.

But this year, the big growth story is the rollout of location-based services (LBS) among the big cellular providers. LBS should be a big opportunity, as GPS-enabled handsets get rolled out. And SIRF has lots of design wins already with these wireless carriers.

Nonetheless, the stock has been in a funk since reporting earnings. The selloff has continued unabated for almost a month now. I think it is overdone, and although there is no obvious levels of support being hit right now, I am buying back my positions.

Short interest has also grown by large amounts. As of April, 23% of the float was sold short. That could spark a lot of short covering, if and when. I think the stock will rise back to the 30s at some point this year, offering an attractive opportunity from today's levels.

long SIRF