FBR Capital Semiconductor Trading Tidbits: NVDA, AMD, QCOM, BRCM, MRVL, TXN and SLAB
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Price: $251.01 +5.79%
Rating Summary:
49 Buy, 12 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
Rating Summary:
49 Buy, 12 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
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FBR Capital Semiconductor Trading Tidbits: NVDA, AMD, QCOM, BRCM, MRVL, TXN and SLAB
FBR analyst says, "We have updated production start checks from Asia with additional stock commentary on most fabless chip firms in our coverage. For 2Q11, overall production starts are expected to be up 3% QOQ, roughly flat with last month's check. We saw positive production start forecast revisions from Marvell (Nasdaq: MRVL) (+22%), Silicon Labs (Nasdaq: SLAB) (+11%), LSI (NYSE: LSI) (+3%) and Mediatek (+3%) more than fully offset negative production start cuts from Altera (Nasdaq: ALTR) (-12%), Broadcom (Nasdaq: BRCM) (-8%), Nvidia (Nasdaq: NVDA) (-5%), Qualcomm (Nasdaq: QCOM) (-5%), and Xilinx (Nasdaq: XLNX) (-3%). For 3Q11, we saw some companies 'book up' the quarter, resulting in large positive start revisions, and overall production starts growing 12% QOQ. Specifically, positive production start forecast revisions from Silicon Labs (+48%), LSI (+42%), Marvell (+41%), Atheros (Nasdaq: ATHR)(+39%), Qualcomm (+13%), and Mediatek (+9%) much more than fully offset production start cuts from Nvidia (-19%), TI (-12%), Broadcom (-8%), and Altera (-6%). Net, these checks are most positive for Marvell, Silicon Labs, Qualcomm, and LSI (in that order), and most negative for Nvidia (especially), Broadcom, Altera, and TI (NYSE: TXN). Regarding chip stocks, clearly macroeconomic pressures are weighing on the group, and further indiscriminate selling is possible if a European sovereign debt crisis or a US debt ceiling crisis were to erupt. That said, we think the SOX is now near the lower end of the 390-450 range we have discussed for months (though it could go lower), and we generally think business trends remain firm, inventories are appropriate, and valuations are becoming quite attractive (11x-12x 2011 P/E for the sector). We do hear of some weakness in handsets, optical, China infrastructure, non-Apple tablets, LCD TVs, with sluggish unit demand in the PC space, and industrial set to see its typical August vacation slowdown. We look for the SOX to stop underperforming the broader market in coming weeks, and then begin to outperform by Labor Day for a run towards 500 into year-end. Key stocks to focus on for potential upside include Outperform-rated QCOM, BRCM, MXIM, IRF, ONNN, and LSI."
FBR analyst says, "We have updated production start checks from Asia with additional stock commentary on most fabless chip firms in our coverage. For 2Q11, overall production starts are expected to be up 3% QOQ, roughly flat with last month's check. We saw positive production start forecast revisions from Marvell (Nasdaq: MRVL) (+22%), Silicon Labs (Nasdaq: SLAB) (+11%), LSI (NYSE: LSI) (+3%) and Mediatek (+3%) more than fully offset negative production start cuts from Altera (Nasdaq: ALTR) (-12%), Broadcom (Nasdaq: BRCM) (-8%), Nvidia (Nasdaq: NVDA) (-5%), Qualcomm (Nasdaq: QCOM) (-5%), and Xilinx (Nasdaq: XLNX) (-3%). For 3Q11, we saw some companies 'book up' the quarter, resulting in large positive start revisions, and overall production starts growing 12% QOQ. Specifically, positive production start forecast revisions from Silicon Labs (+48%), LSI (+42%), Marvell (+41%), Atheros (Nasdaq: ATHR)(+39%), Qualcomm (+13%), and Mediatek (+9%) much more than fully offset production start cuts from Nvidia (-19%), TI (-12%), Broadcom (-8%), and Altera (-6%). Net, these checks are most positive for Marvell, Silicon Labs, Qualcomm, and LSI (in that order), and most negative for Nvidia (especially), Broadcom, Altera, and TI (NYSE: TXN). Regarding chip stocks, clearly macroeconomic pressures are weighing on the group, and further indiscriminate selling is possible if a European sovereign debt crisis or a US debt ceiling crisis were to erupt. That said, we think the SOX is now near the lower end of the 390-450 range we have discussed for months (though it could go lower), and we generally think business trends remain firm, inventories are appropriate, and valuations are becoming quite attractive (11x-12x 2011 P/E for the sector). We do hear of some weakness in handsets, optical, China infrastructure, non-Apple tablets, LCD TVs, with sluggish unit demand in the PC space, and industrial set to see its typical August vacation slowdown. We look for the SOX to stop underperforming the broader market in coming weeks, and then begin to outperform by Labor Day for a run towards 500 into year-end. Key stocks to focus on for potential upside include Outperform-rated QCOM, BRCM, MXIM, IRF, ONNN, and LSI."
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