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Why Super Micro Computer Inc. (SMCI) is Such an Outstanding Stock for Contrarians

It is tempting to move in step with stock market trends. However, analysts and investors tend to act with more emotion than cognition. The contrarian approach to stock exchanges may work best, especially if based on due consideration of relevant facts. This concept applies most especially to the Software & Programming Industry of the Technology Sector.

An independent director has recently passed away. Delayed component deliveries have prompted the management to shift some revenue recognition to another quarter. This has taken the earnings forecast below the expectations of some stock market observers. The stock price has touched a new low. However, these are not the most significant events of April, 2008 for this stock.

This company, which is based in San Jose, CA, has just demonstrated a technological marvel. It makes specialized computers, with a customer-focused approach to design. The company has demonstrated a server with performance standards that no competitor has been able to match. This proprietary technology will enable computers to work at new speeds, consume less energy, and to make less noise as well. This small capital stock now represents unique values for computing in green offices.

Technological excellence comes on top of rock steady and diligent management. The Trailing Twelve Months Price to Earnings Ratio is less than half the industry norm for this period. The five-year sales growth rate is more than twice that of others in the business. The same applies to the five-year Growth Rate of Earnings per Share.

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