Best of the Week
Most Popular
1.Ukraine Preface, the Emerging Dynamics Of Petro-Yuan Standard - Jim_Willie_CB
2. Speculations Reversed - Gold Price Stealth Rally 2014 - Peter_Schiff
3.Bubbleberg News Drivel Masquerading as Financial Reporting - David A. Stockman
4.Nationwide UK House Prices 9.5% Inflation, Housing Market on Steroids, Help to Buy Anniversary - Nadeem_Walayat
5.How to Profit from Palladium Huge Price Surge… - Peter Krauth
6.UK Home Solar Panel Installations Good or Bad for House Buying and Selling? - Nadeem_Walayat
7.Global Gold Manipulation Update - MAP Wave Analysis - Marc_Horn
8.Ukraine Capital Controls and 200% Inflation But Still In Better Shape Than US! - Jeff_Berwick
9.The Rise of a Euro-Chino-Russian Superpower - Stephan Bogner
10.Across Europe Secession Movements Intensify - BATR
Last 72 Hrs
Glaring Q.E. Failure Spotted - Money Velocity Is Falling Rapidly - 16th Apr 14
High-Frequency Insider Trading - 16th Apr 14
Gold Prices 2014: Do What Goldman Does, Not What It Says - 16th Apr 14
These CEOs Will Make Investors Rich - 16th Apr 14
Climate Change, Central Banking And The Faustian Bargain - 16th Apr 14
Every Central Bank for Itself - 16th Apr 14
Social Security, U.S. Treasury Stealing Every Last Penny From Americans - 16th Apr 14
Ukraine Falling to Economic Warfare and Its Own Missteps - 16th Apr 14
Silver and Gold Miners Still Disappoint - 16th Apr 14
Silver, Gold, and What Could Go Wrong - 15th Apr 14
How I Intend to Survive the Meltdown of America - 15th Apr 14
France Wakes Up To The Multicultural Multi-Threat - 15th Apr 14
The Real Purpose Of QE - It’s Not Employment - 15th Apr 14
Peak Coal - 15th Apr 14
Flash Crash, Rigged Markets - What’s the Frequency Zenith? - 15th Apr 14
Forecasting U.S. GDP Growth: A Look at WSJ Economists’ Collective Crystal Ball - 15th Apr 14
Stock Market - Is Something Nasty About to Happen? - 15th Apr 14
How to Trade Your Way To Freedom - 15th Apr 14
Understanding (and Ignoring) the Media Bandwagon Against Gold - 15th Apr 14
When Stock Market Bubble Crashes, Take Refuge in Gold Stocks - 15th Apr 14
Bitcoin Price Strong Appreciation to Be Followed by Declines? - 14th Apr 14
Greece, Turkey, We're Shuffling The Cards on Our Europe Investing Play - 14th Apr 14
Silver Price Ultimate Rally: When Paper Assets Collapse - 14th Apr 14
Get Your Share of an Extra Trillion Euros Money Printing - 14th Apr 14
Fourth Reversals in The Gold and Silver Charts - 14th Apr 14
Stock Market Nearing Rally in a Downtrend - 14th Apr 14
London House Prices Bubble, Debt Slavery, Crimea 2.0 - Russia Ukraine Annexation - 14th Apr 14
Four Horsemen - Top Economists Explain the Source of Our Economic Crisis - Video - 13th Apr 14
Peak Oil And Global Warming – A Question Of Culture - 13th Apr 14
The Global Banking Game Is Rigged, and the FDIC Is Suing - 13th Apr 14
College Degree Earnings Propaganda - 13th Apr 14 - Andrew Syrios
Stock Market Potential Diagonal Triangle Pattern Forming - 12th Apr 14
Ukraine Crisis – Military Flash Drive Thinking - 12th Apr 14
Gold And Silver – 2014 Coud Be A Yawner; Be Prepared For A Surprise - 12th Apr 14
Gold Preparing to Launch as U.S. Dollar Drops to Key Support - 12th Apr 14
Manipulated Stocks Markets And The Empty Bag - 12th Apr 14
Stock Market - It’s Not Time to Panic… It’s Time to Buy - 12th Apr 14
Doctor Doom on the Fiat Money Empire Coming Financial Crisis - 12th Apr 14
Sheffield, Rotherham Roma Benefits Plague, Ch5 Documentary Gypsies on Benefits & Proud - 11th Apr 14
This Bitcoin Price Rally Might Be a Fake One - 11th Apr 14
GDX Gold Stocks Benchmark - 11th Apr 14
Silver Price Finally Outperforms – How Bullish Is That? - 11th Apr 14
Limits to Employment Participation, and Societal Change - 11th Apr 14
US Moves To Restrict Travelers Taking International Flights - 11th Apr 14
Bill Gross to El-Erian: 'Come on, Mohamed, Tell Us Why' You Resigned PIMCO - 11th Apr 14
British Pound GBP/USD - Double Top or Further Rally? - 11th Apr 14
Don't Miss the Boat on Big Biotech Catalysts: Keith Markey - 11th Apr 14
Russia Invaded Crimea and These US Energy Companies Made a Killing - 11th Apr 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Investing in Semiconductor Stocks: Three Chipmakers on the Upswing

Companies / Tech Stocks May 11, 2012 - 11:28 AM GMT

By: Money_Morning

Companies

Best Financial Markets Analysis ArticleDeborah Baratz writes: Global semiconductor sales have been pretty listless lately, but new data suggests a turnaround is on the horizon for this sector.

In fact, one new forecast by research firm IDC predicts the rate of growth in the semiconductor sector could potentially double in the latter part of this year.


For semiconductor stocks, this newfound growth could provide a big lift in profits.

Even smaller chipmakers may have suitors knocking on their doors for takeovers as they look to increase their market share.

What does this mean for investors?

Now is the time to start looking for the next big winner in semiconductors.

Here's why.

Semiconductor Stocks in 2012
According to IDC,semiconductor sales increased 3.7% to $301 billion last year thanks to increased orders for wireless-device chips.

But 2012 looks even better. The forecast has worldwide semiconductor sales increasing 6%-7%. This will come from declining customer inventories and the never-ending demand for smartphones, tablets and "iDevices."

According to the Semiconductor Industry Association (SIA), March worldwide semiconductor sales were already $23.3 billion, up 1.5% from the previous month.

"We are encouraged to see that sequential growth resumed across all regions, especially in Europe and Japan, in March," said Brian Toohey, president of SIA. "We look for seasonal moderate growth to continue in the second quarter and build momentum as 2012 progresses."

Across the globe, European sales increased 3.8% in March, while Japanese sales rose 1.2%. Along with improving macroeconomic conditions and a recovering supply chain from the 2011 Thailand floods, SIA sees an improved outlook.

Semiconductor companies are already reflecting the improvement.

Intel Corp. (Nasdaq: INTC), the world's largest chipmaker, just announced a 7.1% rise in its quarterly dividend to $0.225 cents. Thanks largely to the mobile phone market, INTC believes it is now poised to see "record revenues" this year.

According to Paul Otellini, president and chief executive officer, "Strong demand in our core business and significant progress in smartphones will help drive the gains. This latest dividend increase is one more example of our commitment to return cash to our stockholders."

Qualcomm Inc. (Nasdaq: QCOM) is another.

The chipset maker recently saw its total revenue rise 27.7% year over year to $4.94 million in Q2, surpassing the $4.85 million in analysts' estimates.

Going into the rest of the year QCOM has record-high earnings, a solid balance sheet, lots of product in the pipeline and improved market segmentation.

Investing in Semiconductor Companies: Three Winners
With the recent spate of earnings reports, semiconductor stocks are clearly on the upswing.

Here are three semiconductor stocks worth taking a serious look at:

•Advanced Micro Devices (NYSE: AMD): The second largest producer of microprocessors, GPUS and chipsets worldwide, AMD has a $5.07 billion market cap.
On April 19, the company reported its first quarter earnings and saw its revenue fall 1% year over year with a 6% decline from the first quarter. But its adjusted profit per share rose 50% from the previous year's period.

The company expects its second quarter revenue to either be flat or to increase up to 3% from the first quarter to $1.63 billion. Analysts had expected $1.59 billion for the quarter.

But don't be put off by the recent figures.

AMD plans to cut its costs for cloud computing and the number of data centers it operates globally through "the help of the cloud and hardware upgrades."

Its plan is to move more tasks to the cloud and subsequently open data centers in areas with fewer costs and a smaller tax burden. Increased use of cloud technology will give the company's engineers the opportunity to create chips regardless of where they reside.

Showing additional commitment to change, the company recently announced a new CMO, Collette LaForce. The Dell veteran will restructure the company's global marketing efforts, enhance the company's voice and assist in positioning it for growth.

•Texas Instruments (Nasdaq: TXN): Practically synonymous with semiconductors, TXN sells to electronics designers and manufacturers worldwide. It operates in four segments including analog, embedded processing, wireless and specialized.
Texas Instruments has a $36.85 billion market cap and is the fourth-largest semiconductor company when measured by 2011 revenue.

The company recently announced the "industry's most highly integrated audio codec with embedded miniDSP cores, providing echo and noise cancellation at wideband voice sampling rates up to 16 kHz."

What does this mean? Innovative change.

The company believes it will be a year of growth and reported first quarter revenue of $3.12 billion. According to a recent SEC 10-q filing, "We are poised for growth and share gains as markets rebound. Our product portfolio is strong, and our design position with customers is excellent. Our inventory is well-staged, and production in our factories is ramping. We expect 2012 to be a good year for growth."

Analysts agree. Wedbush Research believes the company will outperform the market.

According to Wedbush, "We believe TI's better-than-expected top-line guidance validates our view that the semi industry's recovery has begun."

•ARM Holdings (NASDAQ: ARMH): The business of ARMH is microprocessors, physical intellectual property (IP) and other related technology and software. It also sells development tools. Most of the chips it designs can be found in smartphones and tablets.
With a market cap of $12.81 billion, ARM Holdings is in a good position to capitalize on the growing mobile market.

The company released strong first quarter numbers on April 23 and increased its full-year revenue target. In all, analysts were happy with the report while Raymond James upgraded ARMH to a strong buy from outperform.

According to Raymond James analyst Michael Rose, "We heard nothing to dissuade us from our belief that ARM remains one of the strongest secular growth stories in tech. ARM remains the de facto leader in smartphones/tablet processors, which is dovetailed by strong licensing trends in non-traditional markets such as microcontrollers, set-top boxes, disk drives, and digital TVs that will drive an incremental royalty stream over the next five years."

ARM's rivalry with Intel Corp. has intensified, but Rose sees it as "more opportunity than risk."

A bright spot in the competition is ARM's "design/multi-sourcing/eco-system" which edges out Intel's process technology/sole sourcing," noted Rose. "We remind investors that Intel's retreat from digital consumer, in our opinion, is due single-handedly to ARM momentum in that space in 2012."

Source :http://moneymorning.com/2012/05/11/investing-in-semiconductor-stocks-three-chipmakers-on-the-upswing/

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014