Boston-based Portolan Capital Management made a significant move in the third quarter by adding 289,844 shares of Semtech Corporation (NASDAQ:SMTC) to its portfolio. This decision resulted in an increase of $30.68 million in the overall position value compared to the previous period. As of September 30, the fund reported holding 668,862 shares of Semtech valued at $47.79 million.
According to a filing with the Securities and Exchange Commission (SEC), Portolan Capital Management’s increased stake in Semtech Corporation reflects its confidence in the company’s prospects. The new position represents 2.6% of the fund’s reported U.S. equity assets, with a total of 119 positions in its portfolio.
The top five holdings after the quarter include NYSE:MOD with $85.6 million (4.6% of AUM), NASDAQ:TTMI with $68.5 million (3.7% of AUM), NYSE:ELF with $64.6 million (3.5% of AUM), NYSE:DBRG with $64 million (3.5% of AUM), and NYSE:CLS with $62 million (3.4% of AUM).
Semtech Corporation, a leading provider of analog and mixed-signal semiconductor products, focuses on signal integrity, protection, wireless, sensing, and power management solutions. The company serves various markets, including enterprise computing, communications, industrial, and consumer electronics, with a diverse international customer base.
With Semtech shares priced at $72.97 as of Friday, the company has seen a 15% increase over the past year, slightly underperforming the S&P 500’s 16.5% gain in the same period.
Semtech’s recent performance has been solid, with record revenue of $267 million in the last quarter, up 13% year over year, and adjusted EPS of $0.48. The company also saw an expansion in adjusted operating margin to 20.6% and an increase in free cash flow to $44.6 million. Management’s guidance for another sequential revenue increase indicates a broadening recovery.
This investment in Semtech reflects a long-term outlook on steady margin expansion, disciplined R&D, and exposure to infrastructure-driven demand. The fund’s conviction add to its portfolio shows a strategic move rather than a speculative trade.
The fundamentals of Semtech and its growth potential make it an attractive investment opportunity for Portolan Capital Management. The company’s specialized product offerings and strong market positioning bode well for future growth and value creation for shareholders.
