SGH to Sell Majority Stake in SMART Modular Brazil

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SMART ($NASDAQ:SGH) Global Holdings (SGH) recently announced that it will be selling 81% of its stake in SMART Modular Brazil to an undisclosed buyer. SMART Global Holdings is a leading designer, manufacturer, and supplier of memory, storage, and hybrid solutions. It is a publicly traded company listed on the NASDAQ Stock Exchange under the symbol SGH. The company offers a wide range of products such as DRAM, NAND Flash, Solid State Drives, and Hybrid Drive Solutions, as well as embedded solutions for various markets including computing, mobile, gaming, automotive, and industrial. The company is expected to benefit from the sale as it will be releasing a substantial amount of capital that can be used for other operations.

The move is also part of SGH’s long-term strategy to focus on high-growth markets such as Latin America. This move provides a great opportunity for investors to capitalize on the potential of SGH’s growth in Latin America.

Market Price

This announcement saw the stock open at $25.1 and close at $25.7, resulting in an 8.1% rise from its previous closing price of 23.7. The proceeds from the sale will go towards further strengthening SGH’s balance sheet and provide additional liquidity. It is also a move to streamline operations, reduce complexity, and improve overall profitability. This move will enable SGH to focus on its core business and expand its presence in key markets.

This sale is the latest in a series of strategic initiatives taken by SGH to improve its balance sheet and increase its financial flexibility. It is expected to be accretive to earnings and should improve shareholder value. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Smart Global. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Smart Global. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Smart Global. More…

Key Ratios Snapshot

Some of the financial key ratios for Smart Global are shown below. More…

Analysis

GoodWhale has recently analyzed the financials of SMART GLOBAL and our Star Chart shows that the company is classified as a ‘rhino’ – a type of company that has achieved moderate revenue or earnings growth. Investors interested in SMART GLOBAL may be drawn to its strong performance in terms of growth and profitability, as well as its healthy cash flows and debt levels. Our analysis gives SMART GLOBAL a health score of 7/10, indicating that it is capable of paying off debt and funding future operations. However, its dividend performance is weaker than other categories, which may be a source of concern to some investors. More…

Peers

The competition among SMART Global Holdings Inc, Diodes Inc, Global Unichip Corp, and DB HiTek Co Ltd is fierce. All four companies are vying for a share of the market for semiconductor products. While each company has its own strengths and weaknesses, all four are committed to providing the best products and services to their customers.

– Diodes Inc ($NASDAQ:DIOD)

Diodes Inc is a leading manufacturer of semiconductor products. Its products are used in a wide range of electronic devices, including mobile phones, computers, automotive electronics, and industrial equipment. The company has a market cap of 3.14B as of 2022 and a Return on Equity of 22.49%. Diodes Inc is a well-respected company with a strong financial position. It is a leader in its industry and its products are in high demand. The company’s products are used in a wide range of electronic devices, making it a major player in the semiconductor industry.

– Global Unichip Corp ($TWSE:3443)

Global Unichip Corp is a fabless semiconductor company that designs, develops, and markets a broad range of semiconductor solutions. The company’s products are used in a variety of end-markets, including automotive, computing, consumer, industrial, and communications. Global Unichip’s market cap is $59.84B as of 2022, and its return on equity is 28.78%. The company’s products are used in a variety of end-markets, including automotive, computing, consumer, industrial, and communications.

– DB HiTek Co Ltd ($KOSE:000990)

Formally known as HiTek, Yageo Corporation is a Taiwanese company that manufactures and supplies passive electronic components. These components include resistors, capacitors, inductors, and sensors. Yageo Corporation was founded in 1977 and has its headquarters in Taipei, Taiwan. The company employs over 12,000 people and has manufacturing facilities in Taiwan, China, Japan, Singapore, Malaysia, and the United States. Yageo Corporation is a publicly traded company with a market capitalization of over $1.8 trillion as of 2022. The company has a return on equity of 33.11%. Yageo Corporation is a leading manufacturer of passive electronic components and is well-positioned to continue its growth in the coming years.

Summary

Smart Global Holdings, Inc. (SGH) recently announced its plan to sell 81% of its shares in SMART Modular Technologies Brazil. This move is expected to be a positive one for investors, as the stock price of SGH moved up the same day the news was released. For potential investors, it is important to consider the implications of this transaction. A closer look into the financials of SMART Modular Technologies Brazil reveals that the company holds a strong market position and has a healthy profit margin.

Furthermore, the company has seen considerable growth in revenue over the past few years. Investors interested in this deal should also consider the location of the company as well as any potential risks involved. In conclusion, this transaction carries potential benefits for investors and is worth further evaluation.