AmTech Reiterates Buy on Microsemi (MSCC)

August 28, 2008 3:04 PM EDT

American Technology Research reiterates its Buy rating on Microsemi (Nasdaq: MSCC).

The firm believes that Microsemi shares could move higher even in this recessionary and inflationary environment due to its "diversified end market exposure" which "should enable top-line growth..." AmTech also sees Microsemi's transfer of its production processes to Ireland as driving margin expansion.

AmTech cites recent checks as indicating:

• Demand for Microsemi’s power amps used for 802.11n applications is strengthening, particularly due to demand from Atheros reference designs.
  
• Microsemi’s sales to the commercial air & satellite market increased 4% Q/Q versus 2% Q/Q for the overall company in the June quarter.
  
• price increases for defense (33% of Microsemi's sales) go into effect October 1, which should be bullish for the stock.

In light of the 22% increase in Microsemi's stock price this year, AmTech still believes the stock is a Buy as it trades at only 19x the firm's CY08 EPS estimate of $1.41.

Microsemi Corporation designs, manufactures, and markets analog and mixed-signal integrated circuits (ICs) and semiconductors.

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