Short-term technical target for the chip-maker is in $27.50's neighborhood.
September 05, 2013 09:32 AM
Cirrus Logic Inc. (CRUS) has been one of the most accumulated stocks in the last four trading days as Wall Street acquired more than 1.26% of the company's market-cap. The old-market axiom of "accumulation before appreciation" comes to mind.
However, CRUS has done some appreciating already. Shares have moved up more than 40 percent after hitting their 52-week low of $16.46 in June 2013. However, there could be more, perhaps, a lot more to go as Cirrus Logic's 52-week high is $45.49.
From our view of CRUS' stock chart, iStock sees an extended rounding bottom formation that dates back to the middle of February 2013. If our assessment is correct, and the recent rise in volume hints that it might be, then the logical short-term technical target for the chipmaker is in $27.50's neighborhood.
On the fundamental side of the analysis ledger, a few analysts have recently written about Cirrus – and others – benefitting from Apple's iPhone upgrade/cycle.
Wedge Partners analyst Brian Blair says, "Any upward adjustments made to volumes and forecasts will positively impact the stocks of a number of key Apple suppliers, several of which have been dormant and have largely underperformed their peers year to date."
Over at Sterne Agee, analyst Andrew Huang told clients, "Guidance provided yesterday by another semiconductor maker, Avago (AVGO), is a positive sign for Cirrus." That's because AVGO's upbeat guidance was "partially driven by production increases at Apple."
If there is upside in earnings potential, it's certainly not showing up in estimates. Cirrus Logic's consensus for the current fiscal year (FY) is $2.36 and for next fiscal year (2015), profits per-share is expected to stumble to $1.79.