Christmas all over Again

HIMX Price Chart

Summary

Recap of Glass, Facebook and Xioami. The price moves at the start of the week.

It's Christmas time for shareholders. The news out today from Microsoft and how it relates to Himax.

Revision of price targets, based off of sales projection and additional EPS.

It has been raining good news for Himax Technologies (NASDAQ:HIMX) this week. There was much speculation surrounding the company's relationship with Goggle (NASDAQ:GOOG) (NASDAQ:GOOGL) on the Glass project. That was laid to rest this week when Google confirmed a 2015 launch of the new version. Facebook (NASDAQ:FB) also highlighted its product Oculus Rift, and once more we are looking at a 2015 launch. I covered both of these events as well as the new Mi Phablet in my article last weekend.

Since that time shares of Himax have risen almost 12%, closing Wednesday at .74. Shares still sit well below , which would be a P/E of 20 of off pre-announced 2014 earnings and does not account for all the good news.

HIMX Price data by YCharts

Christmas came for shareholders of Himax today. Microsoft (NASDAQ:MSFT) announced the new headset they have been working on - HoloLens. The new holographic headset could be available in time for Christmas 2015, although it is still in demo mode. It will almost certainly be available for Christmas 2016. It will probably utilize Himax's patented LCoS display. Shortly after the announcement #HoloLens was already trending on Twitter and the new device should do wonders for Microsoft earnings once the new headset computer is ready for commercial release.

Long-term investors will remember the boost that Kinect gave to XboX sales in 2010. Microsoft's initial estimates that year were 3 and then 5 million units by Christmas. Microsoft actually sold over 8 million units, making Kinect the must have of the item under the Christmas tree. There is no reason to think that HoloLens will be any different in another year or two. The current demos featured a design studio with 3D printing, a walk around Mars and games featuring Minecraft. This is not Glass, this is not Oculus Rift. It is it's own thing and everyone will love it.

Glass also utilizes the LCoS display, and it has been estimated that each unit could be worth $15 -$16 to Himax. If those numbers are accurate and HoloLens only sells 4 million per year, it is an additional $60 - $65 Million for Himax. Sales of HoloLens could add $0.35 - $0.37 a share to EPS in the near future. Using the same P/E 20, that is an additional $6-$7 in share price.

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