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If you're a patient investor, you might now have an opportunity to buy a great company at a discount, one that has a management team with a history of producing growth : NXP Semiconductors (NXPI) .

On Oct. 28 NXP, released its third-quarter results. The earnings-per-share of $1.57 beat analyst estimates of $1.55, while revenue of $1.52 billion fell short of the estimated $1.55 billion. The stock tumbled 20% from a close of $90.92 on Oct. 28 to $73 on Oct. 29. The stock was already down from a 52-week high of $114. 

Though the results were good, the guidance was disturbing. The company was forecasting a 15% decline in revenue for the fourth quarter. The consequence was the decline in share price.

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In March, NXP announced a merger with Freescaleundefined : This new combined company would be valued at about $40 billion. While the company's stock is beaten down now, the true test should come in the first quarter of next year, the first reported quarter for the newly combined company. It's reasonable to give the management and the company a pass for the fourth quarter and focus on results for the first quarter of 2016. 

The new entity will become the largest manufacturer of automotive semiconductors and the largest broad-based MCU supplier. The company anticipated synergies of $200 million in the first year and a $500 million annual run rate in the future. The deal is anticipated to close in the fourth quarter.

With the merger almost complete and companies like Apple reporting solid results, investors were caught completely off guard by the revenue short fall announcement. Thus the volatility. There are questions about the reasons for the steep drop in revenue for the next quarter? What is really happening here?

The question and answer portion of the transcript revealed an interesting nugget. The company said there was only about three months inventory at its distributors, and that it would have liked to have done the reduction over a few quarters.

NXP decided to proceed regardless, to ensure inventories are in line at its distributors with decreased expectations. Later during the Q&A, the company implied that it was trying to realign as quickly as it could ahead of the merger. It wants to ensure inventories are at levels to operate on a more normal basis going forward.

It said at another point that if it had not done this inventory correction now, revenue would have only been down low to mid-single digits. The impression that this series of exchanges left was that most of the inventory correction was being done now to benefit from the synergies of the combined conglomerate.

As of Nov. 4, the stock closed at $79.98 and traded at approximately 15 times 2016 earnings projections. Ultimately, it looks as though NXP is trying to put itself in a favorable position so that when the merger with Freescale is complete, there is no overhang.

The stock probably didn't deserve to decline 20%. The upshot is that a patient investor now has a potentially good buying opportunity.

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The author and the clients of Mott Capital Management, LLC are long shares of NXPI.

Disclosure: Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request the advisor will provide a list of all recommendation made during the past twelve months. Past performance is not indicative of future performance.