Cramer talks up Cirrus Logic shares

(Reuters) - Shares of Cirrus Logic Inc (CRUS.O) rose as much as 15 percent Tuesday, a day after CNBC host Jim Cramer called it "the single-best derivative play" off Apple Inc (AAPL.O).

The strong demand seen for products from Apple, which now accounts for about a third of Cirrus' total revenue, should help push Cirrus shares higher, Cramer was quoted as saying on the Mad Money blog.

Apple's suppliers are barred from talking about their most-famous customer but an analysis by teardown firm Chipworks had identified chips made by Cirrus Logic in Apple's iPad.

The iPad, a 9.7-inch touchscreen tablet meant mainly for games, Web browsing and digital media of all sorts, went on sale in the United States on April 3 and has already sold more than 1 million units.

Analysts expect the company to sell roughly 5 million iPads this year.

"We are also picking up that the iPad continues to do better than expected with surprising strong momentum of the iPad 3G," Kaufman Bros analyst Shaw Wu said in a note.

"(Cramer) highlighted the value of Cirrus and that it was undervalued as of (Monday's) closing price," Capstone Investments analyst Jeff Schreiner said, adding Cramer's comments drove the stock up.

The analyst, who has a "strong buy" rating on Cirrus shares, said the company is seeing strength from iPhone sales and builds for new products such as iPad and the next-generation iPhone.

Schreiner expects these key products to continue to drive revenue at Cirrus through fiscal 2011.

Shares of Cirrus have more than tripled in value over the last one year, while Apple shares have nearly doubled.

Cirrus has over time increased its dependence on larger customers.

Its 10 largest end-customers made up about 36 percent of its sales for fiscal 2009, with just one customer making up more than 15 percent of the company's revenue.

For the fourth-quarter reported on Apr. 27, the company said its largest customer accounted for 33 percent of its quarterly revenue.

Cirrus, which supplies signal processing components for audio and energy applications, expects its largest customer to make up not more than 40 percent of its revenue for the full year.

"We believe the Apple relationship is likely favorable for Cirrus in obtaining additional tier-1 handset vendors," Capstone's Schreiner wrote in a note dated April 28.

Shares of the Austin, Texas-based company touched a new 52-week high of $13.79 in midday trade Tuesday on Nasdaq.

(Reporting by Saqib Iqbal Ahmed in Bangalore; Editing by Unnikrishnan Nair)