Investing in Semiconductors: Expert Analyst Tristan Gerra Discusses Navigating the Discrepancies Between What Companies Claim Relative to Actual Trends and Shares His Top Picks
67 WALL STREET, New York - June 5, 2013 - The Wall Street Transcript has just published its Semiconductors Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Semiconductor Capital Equipment - Cloud Computing, Mobile Device Consumer Demand - Semiconductor Inventory Burnoff - Improvement from Cyclical Bottom - Semiconductor Capital Equipment Spending - New Computing Platform Demand
Companies include: Fairchild Semiconductor Intern (FCS), Intel Corporation (INTC), Altera Corp. (ALTR), Xilinx Inc. (XLNX), Broadcom Corp. (BRCM), Apple Inc. (AAPL), Lattice Semiconductor Corporat (LSCC), STMicroelectronics NV (STM), Micron Technology Inc. (MU), Diodes Incorporated (DIOD), Texas Instruments Inc. (TXN) and many more.
In the following excerpt from the Semiconductors Report, an expert analyst discusses the outlook for the sector for investors:
TWST: You've mentioned a few different names. Are they your top picks? If not, what are your top two or three picks, and what do you like about each?
Mr. Gerra: Intel is our top large-cap idea. Lattice is our top small-cap idea. And then two names that I haven't mentioned yet, which I like as well, are STMicroelectronics (STM) and Micron (MU). STMicro is also a top idea for us.
Catalysts include the divestiture of the STEricsson JV - joint venture - which is going to basically free up about $0.60 of EPS loss per year, as well as an improvement in core business fundamentals combined with a very attractive valuation and a good dividend yield, which should lead the stock to appreciate meaningfully from current levels.
In the midcap space, we like Micron. Micron is really driven by supply/demand dynamics for DRAM that are significantly improving, and lack of new capacity for the next couple of years, the Elpida acquisition, which is a big positive from a mix and end market share standpoint for the company, along with valuation. Micron is our top midcap idea.
TWST: You have "neutral" ratings on about half of your stocks. What broader industry themes can we derive from those "neutral" ratings? What would be catalysts for you to consider upgrading some of those stocks?
Mr. Gerra: We recently upgraded Fairchild and Diodes (DIOD), which now makes about 70% of our semiconductor coverage "outperform"-rated. We upgraded Fairchild and Diodes on a more favorable channel inventory outlook, along with some mild pickup in utilization rates in analog.
We remain neutral on Texas Instruments (TXN) due to valuation and lack of revenue growth. We are also neutral on Altera...
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
