The 25-day quiet period on Smart Global Holdings Inc. (SGH) will end on June 19, allowing the firm's IPO underwriters to publish detailed positive reports and recommendations on the firm for the first time since it went public in late May.

After June 19, we believe SGH's IPO underwriters will issue Buy ratings and favorable research, given the stock's good early market performance, along with other critical factors.

Our firm's research has shown above market returns in a short window of time (-5,+2) days around the event (Day 0). This occurs only for only a handful of firms, such as SGH, with strong syndicates, IPOs, and often exposure to tech.

We view the event as a particular buying opportunity for event-driven investors. At the same time, SGH presents fundamental strength and is well positioned relative to its peers.

Business Overview: Manufacturer and Provider of Memory Solutions Worldwide

Smart Global Holdings designs, manufactures, and sells specialty memory solutions. Its product portfolio includes DRAM (dynamic random access memory) modules for servers, laptops, and desktops. In addition, the company manufactures DRAM integrated circuits for smart TVs, mobile DRAM and flash products for mobile devices, embedded and removable NAND flash products, and other specialty DRAM modules.

SGH also offers supply chain services such as logistics, procurement, temporary warehousing, inventory management, packaging services, kitting, and programming. The company sells its products primarily to original equipment manufacturers through its direct sales force and through independent sales professionals in North America, Europe, Asia, and Latin America. Smart Global Holdings was founded in 1988 as Smart Modular. It changed its name in 2014 and is headquartered in Newark, California.

Leading Market Position & Impressive Customer Base

Smart Global Holdings holds the leading market position by market share in Brazil as a manufacturer of memory for computers and mobile devices. SGH also holds a leading market position worldwide by revenue in specialty memory solutions, especially solutions that meet customer-specific requirement.

Their customer base includes over 250 clients, including Cisco, Samsung, HPE, Dell, and LG. Their top ten clients accounted for 81 percent of net sales for fiscal 2016.

Executive Managers

President, CEO, and Director Iain MacKenzie has served as president since 2002, director since 2004, and CEO since 2005. He has held a variety of leadership positions at other high technology companies including Hughes Microelectronics, Ferrofluidics, Digital Equipment Corporation, and Apricot Computers Ltd. Mr. MacKenzie holds the Higher National Diploma in mechanical and production engineering and the Ordinary National Diploma in electrical/electronics engineering, both from the Kirkcaldy College of Technology (Fife University) in Scotland.

SVP, Chief Operating Officer, and Chief Financial officer Jack Pacheco has served as SVP and COO since 2011. He has served as Chief Financial Officer from 2004 to 2008. During the three years between 2008 and 2011, he held the positions of VP and CFO at Mirion Technologies, and he served as CFO for Ignis Optics from 2001 to 2004. He holds an M.B.A. degree from Golden Gate University and a B.S. degree in Business Administration from Washington State University.

Competitors: Viking Technology, Unigen, Apacer, and Others

Smart Global Holdings faces competition from a variety of other manufacturers of memory solutions, including Viking Technology, ATP, Unigen, Transcend, Apacer, HT Micron, Samsung, Toshiba, SK Hynix, Western Digital (NYSE: WDC), and Micron (Nasdaq: MU). SGH is a relative bargain on a P/S basis at present although smaller in market cap than some peers.

Risk: Exposure To Brazil

The company notes in its SEC filing that a major corruption scandal involving Petrobras (NYSE: PBR), which is Brazil's largest energy company, negatively impacted the value of the Brazilian real beginning in 2014 and 2015. Net sales in Brazil declined from $407.4 million in fiscal year 2104 to $245.5 in fiscal year 2016. However, the Brazilian real has strengthened recently, and sales increased from $99.2 million in the six months ended February 26, 2016 to $154.3 million in the six months ended February 24, 2017.

Conclusion: Buy Shares of SGH Ahead of 6.19

We believe that powerful international underwriters could boost SGH's share price as 6.19 approaches.

Barclays Capital, Deutsche Bank Securities, Jefferies LLC, Needham & Company LLC, Roth Capital Partners, and Stifel Nicolaus & Company will likely release a flurry of positive reports and recommendations, subsequently leading to an uptick in price. Investors anticipating the event could push this even higher.

SGH initially priced at $11, below its expected price range of $13 to $15. The stock closed at $13.45 on its first day of trading and now sits at $14.05 (market close 6.12.2017).

We believe it has significant room to rise as June 19th approaches.