ARM Holdings is a ‘hold’ for Share Centre

22nd July 2015

As ARM Holdings reports this morning, Graham Spooner investment research analyst at The Share Centre, explains what it means for investors…

This morning, the Cambridge based computer chip designer, Arm Holdings, reported a set of encouraging second quarter results which fell slightly short of those forecasted. The group posted what looked like some overall positive numbers including a 22% rise in revenue to £228.5m, helped by increased chip shipments and licensing revenue. Potential new investors will note that shares have opened 3.5% lower on the back of overnight earnings news from US tech companies and as they came in slightly below the market’s expectations. There is good news for current investors as the dividend was raised by a hefty 25% to 3.15p.

With its chips used in around 95% of all smartphones, the group’s future success is still geared to the high demand for smartphones. The group’s prospects within its sector appear to remain bright, but the forward PE rating of around 30 times, although lower than in the recent past, is still demanding. We currently list ARM holdings as a ‘hold’ for medium risk investors looking for growth within their portfolio.

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