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Potential Upside in Semiconductor Stocks (INTC, AMD, MU, BRCM, QCOM, ARMH, SNDK, ALTR, AMAT, TXN)

Paul Ausick — Mon, 23 Jan 2012 16:13:41 +0000

Since the beginning of the year the Philadelphia Semiconductor Index is up more than 13.5%. The run-up may be over for some chip makers and sustainable for others. Analysts are also a little behind in setting new price targets for the companies that have passed or are near previous target prices. Perhaps they’re just taking their time to see what happens with the earnings reports due this week.

We’ve looked 10 semiconductor companies and evaluated their chances of reaching existing price targets during the coming year. The companies are Intel Corp. (NASDAQ: INTC), Advanced Micro Devices Inc. (NYSE: AMD), Micron Technology Inc. (NASDAQ: MU), Broadcom Corp. (NASDAQ: BRCM), Qualcomm Corp. (NASDAQ: QCOM), ARM Holdings plc (NASDAQ: ARMH), SanDisk Corp. (NASDAQ: SNDK), Altera Corp. (NASDAQ: ALTR), Applied Materials Inc. (NASDAQ: AMAT), and Texas Instruments Inc. (NYSE: TXN). Data comes from Yahoo! Finance and MarketWatch.

Intel Corp. (NASDAQ: INTC) has a consensus price target of $27 and current price around $26.83, for a potential upside of about 1%. Intel reported stellar earnings last week and the stock posted a new 52-week high earlier this morning. Sales of PCs have not been as weak as feared, and margins have remained high. The new Ultrabooks, which the company is supporting with a very strong marketing budget, could really push the company substantially higher. As of this moment though, shares are fully valued.

Advanced Micro Devices Inc. (NYSE: AMD) has a consensus price target of $6.00 and a current price around $6.55, leaving no upside. The company reports earnings tomorrow and is expected to post EPS of $0.16 on revenue of $1.72 billion. The company’s shares have jumped by about a dollar in the past month, and continued improvement, especially in the server market, should push the target price higher.

Micron Technology Inc. (NASDAQ: MU) has a consensus price target of $8.75 and a current price around $8.00, for a potential upside of 9%. Last month the company’s price target was $8/share and the shares were trading at around $6.25. How much more steam can be left in Micron after that?

Broadcom Corp. (NASDAQ: BRCM) has a consensus price target of $41 and a current price around $34.92, for a potential upside of 17%. Broadcom shares have risen by more than $5/share in the last month, but unlike Micron, there’s still a lot of headroom.

Qualcomm Inc. (NASDAQ: QCOM) has a median price target of $67 and a current price around $58.60, for a potential upside of 14%. Qualcomm shares have gained more than 7% in the first three weeks of the year and the share price is up more than $4. The company has a firm position in the mobile device market and the company should continue to post growth in 2012.

ARM Holdings plc (NASDAQ: ARMH) has a consensus price target of $33.75 and a current price around $27.75, for a potential upside of more than 22%. ARM’s target price has jumped by nearly $7/share in the past month, but it is trading at nearly the same price as a month ago. Shares gained nearly 35% in the past year, but royalty payments are falling. For the year-to-date, shares are slightly down. To hit its new target, ARM has to get going.

SanDisk Corp. (NASDAQ: SNDK) has a consensus price target of $59.50 and a current price around $51.87, for a potential upside of 14.7%. SanDisk’s shares are up about 5.5% so far this year after a nearly flat 2011. Apple’s recent acquisition of of a NAND maker could sharply curtail SanDisk’s sales of the chips for iPhones and iPads.

Altera Corp. (NASDAQ: ALTR) has a consensus price target of $43 and a current price around $39.90, for a potential upside of 7.8%. Altera’s price target has been raised in the past month, and the company’s share price is also higher. Shares have risen more than 7% year-to-date, and the company is expected to report EPS of $0.42 and revenue of $447.52 million tomorrow.

Applied Materials Inc. (NASDAQ: AMAT) has a median price target of $13 and a current price around $12.29, for a potential upside of 5.8%. AMAT’s shares have jumped more than 15% since the beginning of January, and the price target has not changed. There’s not a lot to like here as far as expected upside goes.

Texas Instruments Inc. (NYSE: TXN) has a consensus target price of $34 and a current price around $33.42, for a potential upside of less than 2%. TI is expected to report EPS of $0.39 and revenue of $3.25 billion after the market closes today. The company lowered estimates in December, and there’s a decent chance TI will beat those lowered expectations. If so, a new target nearer the company’s 52-week high of $36.71 would be in order. That could raise upside potential to around 12%.

In the last month, Intel has essentially hit its target price, and because the target hasn’t been raised, there could be some question among analysts about the staying power of the recent rise. Broadcom and Qualcomm offer the best bets to post share price gains, and the targets for both are well within reach.

Paul Ausick

Filed under: Earnings, Industry, Semiconductor, Semiconductors, Technology Tagged: ALTR, AMAT, AMD, ARMH, BRCM, INTC, MU, QCOM, SNDK, TXN

Upside in Top Semiconductor Stocks for 2012 (INTC, AMD, MU, BRCM, QCOM, ARMH, SNDK, ALTR, AMAT, TXN)

Paul Ausick — Thu, 29 Dec 2011 17:30:49 +0000

Shares in semiconductor stocks have gained and lost value in about equal number during 2011. The run-up in share prices may be over for some and sustainable for others. For stocks that lost value during the year, gains in 2012 may be difficult to come by as the overall market for semiconductors has been getting softer as the new year gets closer.

Intel Corp. (NASDAQ: INTC) has a consensus price target of $27 and current price around $24.47, for a potential upside of 10.3%. Intel has put a lot of marketing muscle behind its Ultrabook design, with more models to come from more manufacturers in 2012. A new version of the Windows operating system is also due in late summer that should help with Ultrabook sales. Intel still hasn’t come up with a strategy to attack the mobile device market, and while that won’t be fatal, it could weigh on revenue and profits next year unless the Ultrabook is a blowout success.

Advanced Micro Devices Inc. (NYSE: AMD) has a consensus price target of $6.20 and a current price around $5.36, for a potential upside of 15.7%. AMD’s share price fell more than -33% in the past 12 months. The company introduced a new high-speed graphics chip recently that has been well-received. AMD’s server market share is wobbly though, although it has made progress in notebooks. But expecting a gain of more than 15% seems like wishful thinking.

Micron Technology Inc. (NASDAQ: MU) has a consensus price target of $8 and a current price around $6.24, for a potential upside of 28.2%. Micron’s shares jumped last week on a weak earnings report primarily on the basis of more expected consolidation in the DRAM market. Pricing has been weak for DRAM chips, but Micron is in a better position than most competitors to be among the survivors. Still, a lot of things need to go right for the company to hit its price target.

Broadcom Corp. (NASDAQ: BRCM) has a consensus price target of $41 and a current price around $29.53, for a potential upside of 38.8%. Broadcom has posted strong revenue and profit growth in 2011, but its share price has fallen by about -32%. Revenue and profit are both expected to continue growing in 2012, and the company is not a bad bet to hit its current price target.

Filed under: Analyst Calls, Industry, Semiconductor, Semiconductors, Technology, Technology Companies Tagged: ALTR, AMAT, AMD, ARMH, BRCM, INTC, MU, QCOM, SNDK, TXN

24/7 Wall St. Closing Bell (RIMM, QCOM, AMAT, HPQ, NFLX, TIF, MAGS, RIMM, STX, INHX, GLW, AMR)

Administrator — Tue, 29 Nov 2011 21:04:39 +0000

Markets opened higher this morning but the day ended up mixed between stock winners and losers. Janet Yellen talked more about her outlook inside the Federal Reserve, but more poor housing price data was considered. As has become the norm, the headlines in Europe were watched all day and the reaction to Iran overrunning the U.K. embassy had only a limited impact.

The unofficial closing bells, which are likely to change, put the DJIA up almost 34 points to 11,556.69, the NASDAQ fell 0.5% to 2,515.51 and the S&P 500 was up 0.23% at $1,195.22.

There were several analyst upgrades and downgrades today, including Research in Motion Ltd. (NASDAQ: RIMM) raised to ‘market perform’ at Bernstein. Other ratings actions included Qualcomm Inc. (NASDAQ: QCOM) started as ‘outperform’ at Scotia; Applied Materials Inc. (NASDAQ: AMAT) started as ‘hold’ at Deutsche Bank; Hewlett-Packard Co. (NYSE: HPQ) raised to ‘outperform’ at RBC; and Netflix, Inc. (NASDAQ: NFLX) maintained as ‘sell’ and price target cut to $57 at Canaccord Genuity.

Here are today’s big post-earnings reactions with prices during the last half-hour of trading: Tiffany & Co. (NYSE: TIF) is down almost 8.7% at $67.25 right before the close. Magal Security Systems Ltd. (NASDAQ: MAGS) was up over 70% at %4.58 right before the closing bell after strong earnings. Other news of interest includes the reverse split and delisting of B+H Ocean Carriers Ltd. on the Amex, a further sign of troubles facing the shipping industry. Several other standouts from today are as follows…

Research in Motion Ltd. (NASDAQ: RIMM) was up almost 6% at $17.46 in the final minutes as that analyst upgrade identified a merger scenario.

Seagate Technology PLC (NYSE: STX) was up 4% at $16.64 in the final minutes. The storage drive maker raised its revenue outlook for the current quarter, and an analyst at Citi raised the company’s price target from $24 to $26.

Inhibitex, Inc. (NASDAQ: INHX) was up as it benefits from the current interest in hepatitis drug developers, and shares were up 20.5% at $13.74 in the final minutes before the close.

Corning Inc . (NYSE: GLW) was pounded lower with shares down 10.5% after the company lowered its fourth-quarter outlook and said that an unnamed Korean customer was not going to honor its contracts, sending earnings estimates down by -30%. This Korean contract default was not in any analyst models and that was not an expected event even if the warning should have been expected.

AMR Corp. (NYSE: AMR) was the loser of the day… bankruptcy! Shares were down just over 80% at $0.813 right before the close.

Stay tuned for Wednesday. We have noted the following events (all times Eastern):

7:00 a.m. – Mortgage Bankers Association purchase applications report
7:30 a.m. – Challenger job-cut report
8:15 a.m. – ADP employment report
9:45 a.m. – Chicago purchasing manager’s index
10:00 a.m. – National Association of Realtors pending home sales report
10:30 a.m. – EIA weekly petroleum status report
2:00 p.m. – Federal Reserve Beige Book released
3:00 p.m. – US Department of Agriculture Farm Prices report

JON C. OGG

Filed under: The Day, Trading Alert Tagged: AMAT, AMR, GLW, HPQ, INHX, MAGS, NFLX, QCOM, RIMM, STX, TIF

Top Analyst Upgrades & Downgrades (AMAT, BDX, DD, GCO, HPQ, HIBB, IM, KOG, NBR, NFLX, NR, QCOM, RIMM, SPB)

Administrator — Tue, 29 Nov 2011 13:47:18 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street research calls this Tuesday morning.

Applied Materials Inc. (NASDAQ: AMAT) Started as Hold at Deutsche Bank.
Becton Dickinson & Co. (NYSE: BDX) Reiterated Buy with $87 target at Argus.
E. I. du Pont de Nemours and Company (NYSE: DD) Started as Neutral at UBS.
Genesco Inc. (NYSE: GCO) named as Value stock of the day at Zacks.
Hewlett-Packard Co. (NYSE: HPQ) Raised to Outperform at RBC.
Hibbett Sporting Goods (NASDAQ: HIBB) named as Bull of the Day at Zacks.
Ingram Micro, Inc. (NYSE: IM) named as Bear of the Day at Zacks.
Kodiak Oil & Gas Corp. (NYSE: KOG) Reiterated Outperform and raised target to $11 at Credit Suisse.
Nabors Industries Ltd. (NYSE: NBR) Cut to Hold at Jefferies.
Netflix, Inc. (NASDAQ: NFLX) maintained Sell but cut target to $57 at Canaccord Genuity.
Newpark Resources (NYSE: NR) Started as Hold at Canaccord Genuity.
QUALCOMM Incorporated (NASDAQ: QCOM) Started as Outperform at Scotia.
Research In Motion Limited (NASDAQ: RIMM) Raised to Market Perform at Bernstein.
Spectrum Brands Inc (NYSE: SPB) Started as Outperform at Credit Suisse.

JON C. OGG

Filed under: Analyst Calls Tagged: AMAT, BDX, DD, GCO, HIBB, HPQ, IM, KOG, NBR, NFLX, NR, QCOM, RIMM, SPB

Top Analyst Upgrades & Downgrades (AMZN, AMAT, SAM, CAM, CIM, GNW, MHR, MPEL, NVDA, PKD, PLSX, RF, SVU, UTHR, ZMH)

Administrator — Fri, 11 Nov 2011 13:21:17 +0000

These are some of Friday’s top analyst upgrades, downgrades, and initiations seen from Wall Street research calls.

Amazon.com Inc. (NASDAQ: AMZN) Started as Neutral at Nomura.
Applied Materials Inc. (NASDAQ: AMAT) Started as Neutral with $13 target at Credit Suisse.
Boston Beer Company (NYSE: SAM) named Momentum stock of the day at Zacks.
Cameron International (NYSE: CAM) Reiterated Buy with $73 target at BofA/ML.
Chimera Investment Corporation (NYSE: CIM) Raised to Neutral at Stern Agee.
Genworth Financial Inc. (NYSE: GNW) Raised to Neutral at Citigroup.
Magnum Hunter Resources (NYSE: MHR) reiterated Buy and raised target to $8.00 at Canaccord Genuity.
Melco Crown Entertainment Ltd. (NASDAQ: MPEL) maintained Neutral but cut target to $14 at JPMorgan.
NVIDIA Corporation (NASDAQ: NVDA) Reiterated Buy with $18 target at BofA/ML.
Parker Drilling Company (NYSE: PKD) named value stock of the day at Zacks.
Plexus Corporation (NASDAQ: PLXS) named Bear of the Day at Zacks.
Regions Financial Corporation (NYSE: RF) Started as Outperform at BMO Capital.
SUPERVALU Inc. (NYSE: SVU) Reinstated as Neutral at BofA/ML.
United Therapeutics (NASDAQ: UTHR) Raised to Outperform as Bull of the Day as Zacks.
Zimmer Holdings Inc. (NYSE: ZMH) Cut to Hold at Argus.

JON C. OGG

Filed under: Analyst Calls Tagged: AMAT, AMZN, CAM, CIM, GNW, MHR, MPEL, NVDA, PKD, PLSX, RF, SAM, SVU, UTHR, ZMH

Applied Gets Deeper Into Client Base With Varian Buyout Nod (AMAT, VSEA, INTC, IBM, MU)

Administrator — Mon, 07 Nov 2011 19:42:36 +0000

Applied Materials Inc. (NASDAQ: AMAT) has just submitted a SEC filing disclosing that the Chinese Ministry of Commerce has now approved its acquisition of Varian Semiconductor Equipment Associates, Inc. (NASDAQ: VSEA). The merger goes back to May 3 and this was the last of the needed regulatory approvals to close upon the $63.00 per share in cash merger.

Applied expects to close the merger on November 10, 2011. The world’s largest equipment maker for semiconductor manufacturing paid a 55% premium back when its own stock was closer to $15.00 versus about $12.35 today. The company cannot be blamed for the market, but Applied Materials certainly did not heed the “sell in May and go away!” creed. If it had, perhaps the deal could have been done for 10% or even 20% less depending upon whether or not Varian’s management would have been willing to sell at market-adjusted prices.

Applied has claimed that the acquisition will lift earnings per share within a year as well as adding in $60 million in annual savings after Applied integrates Varian’s ion implantation gear that is used in making chips or integrated circuits for consumer electronics. Our latest figures show that this may be about 5% of the wafer fabrication equipment market of $35 billion.

This merger was Applied’s largest-ever acquisition and the goal was to gain market share for higher performance chips. It can also be considered a buy that goes deeper into solar, as well as display and light-emitting diodes.

Varian’s key customers were previously reported as Intel Corporation (NASDAQ: INTC) and IBM (NYSE: IBM), as well as Micron Technology Inc. (NYSE: MU), and key players like GlobalFoundries, Hynix, and others. Another merger is done, now comes the integration.

JON C. OGG

Filed under: Mergers and Buy Outs, Semiconductor Tagged: AMAT, IBM, INTC, MU, VSEA

Expected Price Gains for Chip Maker Stocks (INTC, AMD, TXN, BRCM, MRVL, XLNX, AMAT, ARMH, NVDA, QCOM)

Paul Ausick — Wed, 26 Oct 2011 19:11:27 +0000

Nearly every forecast for PC sales indicates slower growth in desktop and laptop sales, waning sales of netbooks, and rising, if not booming, sales for mobile devices like smartphones and tablets. If those forecasts are borne out, chip makers for mobile devices could suck a lot of the air out of the PC microprocessor market, but could also invigorate the server market.The issue for mobile chip makers is competition. There are several companies designing and making the chips that run all those smartphones and tablets, and a clear winner has yet to be named. Our look at chip-maker stocks today includes Intel Corp. (NASDAQ: INTC), Advanced Micro Devices Inc. (NYSE: AMD), Texas Instruments Inc. (NYSE: TXN), Broadcom Corp. (NASDAQ: BRCM), Marvel Technology Group Ltd. (NASDAQ: MRVL), Xilinx Inc. (NASDAQ: XLNX), Applied Materials Inc. (NASDAQ: AMAT), ARM Holdings, plc (NASDAQ: ARMH), Nvidia Corp. (NASDAQ: NVDA), and Qualcomm Inc. (NASDAQ: QCOM).All data comes from Yahoo! Finance and MarketWatch, and share prices were gathered shortly after noon today.

1. Intel Corp. (NASDAQ: INTC)
Intel has a median target price of $27.00 from 36 brokers. Shortly after noon today, shares are trading today at $24.56, for an implied gain of $2.44, or 10%. Intel’s forward P/E is 9.6 and the company does pays a dividend yield of 3.4%. The stock’s 52-week trading range is $19.16-$24.84, and at today’s price that’s about 28% above its 52-week low, posted earlier this morning, and 1% below the 52-week high. Intel posted record revenue in the third quarter, but the company still hasn’t made a significant dent in the mobile device market. Its Atom microprocessor sales were down -32% year-over-year as netbook sales continue to slide. The company is gearing up a big push for its low-profile, low-power laptops called Ultrabooks, which are aimed at a market niche now dominated by the MacBook Air from Apple Inc. (NASDAQ: AAPL).

Also Read: A New Blow To Housing: More Boomers Will Stay Put

2. Advanced Micro Devices Inc. (NYSE: AMD)
AMD has a median target price of $6.50 from 27 brokers. Shares are trading today at $4.99, for an implied gain of $1.51, or 30%. AMD’s forward P/E is 8.81 and the company does not pay a dividend. The stock’s 52-week trading range is $4.31-$9.58, and at today’s price that’s about 16% above its 52-week low, posted earlier this morning, and 48% below the 52-week high. AMD posts third-quarter earnings tomorrow, and analysts are expecting EPS of $0.10 on sales of $1.65 billion. That’s $0.05 less per share than the company earned in the year-ago quarter. For the December quarter, analysts currently expect EPS of $0.15, which would beat the year-ago quarter by a penny. The company finally hired a new CEO in August, but even he is unlikely to turn this company around any time soon.

3. Texas Instruments Inc. (NYSE: TXN)
Texan Instruments has a median target price of $32.00 from 33 brokers. Shares are trading today at $30.89, for an implied gain of $1.11, or 4%. TI’s forward P/E is 12.83 and the company pays a dividend yield of 2.1%. The stock’s 52-week trading range is $24.34-$36.71, and at today’s price that’s about 27% above its 52-week low, posted earlier this morning, and 16% below the 52-week high. TI recently completed its acquisition of National Semiconductor, and that could help it next quarter. It’s earnings in the third quarter were barely newsworthy, but several analysts are bullish on the stock going forward, mainly due to TI’s low cost structure. There’s barely anything in the company’s recent performance to substantiate a positive outlook on this stock, so analysts are looking into a crystal ball and seeing what they were looking for.

4. Broadcom Corp. (NASDAQ: BRCM)
Broadcom has a median target price of $45.00 from 35 brokers. Shares are trading today at $34.86, for an implied gain of $10.14, or 29%. Broadcom’s forward P/E is 11.22 and the company pays a dividend yield of 1%. The stock’s 52-week trading range is $29.05-$47.39, and at today’s price that’s about 20% above its 52-week low, posted earlier this morning, and 26% below the 52-week high. Broadcom reported weak earnings yesterday and guided fourth quarter earnings lower. The company makes chips for mobile devices from Apple, Samsung, and Nokia Corp. (NYSE: NOK), and its business should be better than it is. The company needs to get bigger orders from these customers or it needs to push its way into a supply deal with a low-cost Chinese mobile phone maker.

Also Read: Sony Goes All In On Smartphone Market

5. Marvel Technology Group Ltd. (NASDAQ: MRVL)
Marvel has a median target price of $18.25 from 30 brokers. Shares are trading today at $13.51, for an implied gain of $4.74, or 35%. Marvel’s forward P/E is 9.01 and the company does not pay a dividend. The stock’s 52-week trading range is $11.23-$22.01, and at today’s price that’s about 20% above its 52-week low, posted earlier this morning, and 39% below the 52-week high. Marvel stock has the highest implied gain of any stock we’ve looked at here. Its price has fallen recently due to flooding in Thailand, where Western Digital Corp. (NYSE: WDC) uses Marvel chips in its disk drive production and where manufacturing is not expected to be back at full capacity until the first quarter of next year.

Filed under: Analyst Calls, Consumer Electronics, Hardware, Industry, Semiconductor, Semiconductors, Technology Tagged: AMAT, AMD, ARMH, BRCM, INTC, MRVL, NVDA, QCOM, TXN, XLNX

Expected Price Gains in Solar Stocks Are Strictly Illusions (AMAT, FSLR, WFR, GTAT, SPWRA, STP, TSL, LDK, JASO)

Paul Ausick — Mon, 24 Oct 2011 17:09:39 +0000

About a month and a half ago, we looked at several solar stocks to try to determine if there happened to be a good value play in the sector. Given the significant drop in share prices since the beginning of the year, the stocks looked more like value traps than values, with one possible exception. Since that time, the outlook for the sector has deteriorated even more. We decided to take another look at the five stocks and have added four of the Chinese solar makers to give a more complete view of what’s going on in the sector. The stocks we have looked at are Applied Materials (NASDAQ: AMAT), First Solar (NASDAQ: FSLR), MEMC Electronic Materials (NYSE: WFR), GT Advanced Technologies (NASDAQ: GTAT), SunPower (NASDAQ: SPWRA), Suntech Power (NYSE: STP), Trina Solar (NYSE: TSL), LDK Solar (NYSE: LDK) and JA Solar (NASDAQ: JASO).

The most noticeable data point is how far off these stocks are from their 52-week highs. The U.S.-based stocks are off nearly 60%, while the China-based companies are down a minimum of 75%. Trina and LDK have been hit with accounting questions, as have many other Chinese firms, and that has carried over to the other Chinese solar makers as well. That is likely the cause of the 15% differential in current distance from the 52-week high.

Applied Materials has a median target price of $12.50 from 17 brokers. Shortly before noon today, shares are trading at $11.96, for an implied gain of $0.54, or 4.5%. Applied’s forward P/E is 12.46 and the company pays a dividend yield of 2.7%. The stock’s 52-week trading range is $9.70 to $16.93, and at today’s price that is about 23% above its 52-week low, posted earlier this morning, and 29% below the 52-week high. Applied’s dividend yield has dropped from nearly 3% six weeks ago, its price target has fallen from $13.88, and it has posted a new 52-week low. At our last look, this was the one company that looked like it might be a value play, but that view is getting weaker by the day. Applied is the only company in this group that pays a dividend.

First Solar has a median target price of $108.50 from 34 brokers. Shortly before noon, shares are trading today at $60.22, for an implied gain of $48.28, or 80%. First Solar’s forward P/E is 5.97 and the company does not pay a dividend. The stock’s 52-week trading range is $50.87 to $175.45, and at today’s price that is about 18% above its 52-week low and 66% below the 52-week high. First Solar is the largest of the solar panel makers measured by market cap. The company’s low-cost leadership has been challenged by the constantly falling prices of crystalline solar manufacturers, particularly the Chinese. Once a growth stock, First Solar shares have performed miserably so far this year.

MEMC Electronic Materials has a median target price of $9.00 from 20 brokers. Shortly before noon today, shares are trading at $6.19, for an implied gain of $2.81, or 45%. MEMC’s forward P/E is 5.84 and the company does not pay a dividend. The stock’s 52-week trading range is $4.58 to $15.04, and at today’s price that is about 35% above its 52-week low and 59% below the 52-week high. MEMC has been able to hold the line somewhat on solar wafers in the face of increasing competition from Chinese makers. The company, like First Solar and SunPower, also owns a solar project development company, SunEdison, and if there is any growth in the solar sector, it is in financing and installing rooftop systems. The project groups of these three companies are geared toward industrial-scale projects, though, so they will have to change direction or they will not see much benefit from rooftop installation growth.

GT Advanced Technologies has a median target price of $15.00 from 25 brokers. Shortly before noon, shares are trading today at $7.34, for an implied gain of $7.66, or 104%. GT’s forward P/E is 3.94 and the company does not pay a dividend. The stock’s 52-week trading range is $6.40 to $17.50, and at today’s price that is about 15% above its 52-week low and 58% below the 52-week high. Formerly known as GT Solar, this company had a breakout first half of 2011 as the expansion of China’s manufacturing capacity created high demand for GT’s specialized manufacturing equipment. Now that capacity exceeds demand, new orders have slowed and prospects for growth are dimming.

SunPower has a median target price of $13.00 from 13 brokers. Shortly before noon today, shares are trading at $9.67, for an implied gain of $3.33, or 34%. SunPower’s forward P/E is 9.28 and the company does not pay a dividend. The stock’s 52-week trading range is $6.60 to $23.36, and at today’s price that is about 47% above its 52-week low and 59% below the 52-week high. SunPower’s shares jumped to 52-week highs on the offer by French energy giant Total SA (NYSE: TOT) to acquire 60% of SunPower’s stock. Shares have tumbled since then, and it is not unthinkable that Total overpaid for the company. SunPower is not a low-cost provider of solar panels, and that could limit the company’s growth going forward.

Suntech Power has a median target price of $4.00 from 30 brokers. Shortly before noon today, shares are trading at $2.37, for an implied gain of $1.63, or 69%. Suntech’s forward P/E is 34.29 and the company does not pay a dividend. The stock’s 52-week trading range is $1.70 to $10.83, and at today’s price that is about 39% above its 52-week low and 78% below the 52-week high. Suntech now makes more solar modules than any other company in the world. That would be great, if the company could sell the modules at a price that offers it a profit. A recent trade case against Chinese solar makers could push these stocks down even more.

Trina Solar has a median target price of $15.00 from 26 brokers. Shortly before noon, shares are trading today at $7.70, for an implied gain of $7.30, or 95%. Trina’s forward P/E is 6.26 and the company does not pay a dividend. The stock’s 52-week trading range is $5.28 to $31.08, and at today’s price that is about 46% above its 52-week low and 75% below the 52-week high. Like Suntech, Trina is a low-cost, high-volume maker of solar panels and it faces all the same problems.

LDK Solar has a median target price of $5.80 from 14 brokers. Shortly before noon today, shares are trading at $3.27, for an implied gain of $2.53, or 77%. LDK’s forward P/E is 10.64 and the company does not pay a dividend. The stock ’s 52-week trading range is $2.55 to $15.10, and at today’s price that is about 28% above its 52-week low and 78% below the 52-week high. LDK’s implied growth of 77% is pure fiction, at least through the end of 2013.

JA Solar has a median target price of $3.00 from 14 brokers. Shortly before noon today, shares are trading at $2.30, for an implied gain of $0.70, or 30%. JA Solar’s forward P/E is 5.43 and the company does not pay a dividend. The stock’s 52-week trading range is $1.46 to $9.77, and at today’s price that is about 58% above its 52-week low and 76% below the 52-week high. JA Solar shares are the furthest above their 52-week low of any of the stocks in the group. That might be good news if the forward P/E were greater than 5.43. Like the other Chinese makers, this stock is very weak and could be the first of all these stocks to bust the buck on the way down.

Paul Ausick

Filed under: Alternative Energy, Analyst Calls, China, Green Biz, Value Investing Tagged: AMAT, FSLR, GTAT, JASO, LDK, SPWRA, STP, TOT, TSL, WFR

Earnings Season Arrives, Top Earnings Previews For The Week Ahead (NVLS, AA, ADTN, HST, PEP, GOOG, JBHT, JPM, SWY, MAT)

Administrator — Fri, 07 Oct 2011 17:15:40 +0000

They’re Here! Next week will launch the corporate earnings season for the third quarter. The media is going to tell you that this is the most important earnings season in quite some time. The media always says that, but this time it is true because investors want to know whether to still model in growth or whether they need to dig in for a recessionary climate.

24/7 Wall St. has compiled detailed earnings previews for the following companies: Novellus Systems Inc. (NASDAQ: NVLS); Alcoa Inc. (NYSE: AA); ADTRAN Inc. (NASDAQ: ADTN); Host Hotels and Resorts Inc. (NYSE: HST); Pepsico Inc. (NYSE: PEP); Google Inc. (NASDAQ: GOOG); J. B. Hunt Transport Services Inc. (NASDAQ: JBHT); J.P. Morgan Chase & Co. (NYSE: JPM); Safeway Inc. (NYSE: SWY); and Mattel Inc. (NASDAQ: MAT).

Some of these companies will not really seem on the surface to be sector-movers or market-moving companies, but these have been selected because they are the first ones of their peer groups to be reporting earnings.

We have created a detailed earnings preview for each with consensus estimates from Thomson Reuters and added color in on each for investors to see what exactly is worth consideration this earnings season. We have also added in recent price history and named where to look for additonal action (or fallout).

Monday, October 10

Novellus Systems Inc. (NASDAQ: NVLS) is the first chip equipment player to report for this earnings season. it has been a few weeks since we have had earnings reports or guidance in the sector so we will be paying close attention since so many companies that are chip equipment customers have talked down their numbers in recent weeks. Our belief is that expectations are very low for the quarter ahead. Estimates are $0.68 EPS and $311.9 million in revenue; next quarter estimates are $0.50 EPS and $278.5 million in revenue. With shares hovering around $30.00 on Friday, the 52-week range is $25.26 to $41.82 and shares were above $36 in early July. After Novellus reports, we would be watching the following: Applied Materials Inc. (NASDAQ: AMAT), KLA-Tencor Corporation (NASDAQ: KLAC), and Lam Research Corporation (NASDAQ: LRCX).

Tuesday, October 11

Alcoa Inc. (NYSE: AA) has already talked down aluminum prices and we have already seen slowing demand out of China talked about by many sectors. Alcoa keeps maintaining that it can double its business by 2020 and we do not expect that to be changed by management even if it guides lower expectations ahead. Estimates are $0.23 EPS and $6.24 billion in revenue; next quarter estimates are $0.23 EPS and $6.11 billion in revenue. At $9.80 on Friday, the 52-week range is $8.45 to $19.47 and this one was above $16 at the start of July. There are many metals stocks to watch, some in aluminum and some in other metals: Century Aluminum Co. (NASDAQ: CENX), Reliance Steel & Aluminum Co. (NYSE: RS); Kaiser Aluminum Corporation (NASDAQ: KALU); Titanium Metals Corporation (NYSE: TIE); and Nucor Corporation (NYSE: NUE).

Filed under: Calendar, Corporate Governance, Earnings, Earnings Warning, Economy, Editor's Picks Tagged: AA, ADTN, AMAT, BAC, C, CENX, CHH, CIEN, GOOG, HAS, HST, JBHT, JPM, KALU, KLAC, KO, KR, LRCX, LSTR, MAR, MAT, NUE, NVLS, PEP, RS, SWY, TIE, TLAB, WFC

Short Seller Moves in Alt Energy Stocks (FSLR, SPWRA, ENER, LDK, TSL, TSLA, RBCN, VECO, CREE, CPST, AMAT, GTAT)

Administrator — Tue, 27 Sep 2011 12:33:38 +0000

In the wake of the weak global economic news, some alternative energy stocks are being swept along in the current of bad news, while a few others are making a bit of a comeback. Overall, though, short interest in these alt energy stocks remains quite high.

In the solar sector, short interest in First Solar Inc. (NASDAQ: FSLR) rose by 10.5% in the week ending August 31st, to 18.85 million shares, or nearly 32% of the stock’s float. Short interest in SunPower Corp. (NASDAQ: SPWRA) fell by -4.1%, to 7.22 million shares, or 28% of the stock’s float. Short interest in Energy Conversion Devices, Inc. (NASDAQ: ENER) rose slightly, 0.6%, to 14.31 million shares, or 25% of the stock’s float. Short interest in LDK Solar Co. Inc. (NYSE: LDK) fell by -20%, to 29.28 million shares. LDK’s days to cover is 11. Short interest in Trina Solar Ltd. (NYSE: TSL) rose 23.8%, to 20.54 million shares and days to cover is 5.

Among the leaders in short interest is Tesla Motors, Inc., with 22.9 million shares short, or 43% of the float. Days to cover Tesla stock is a very high 31.

The LED lighting sector has also attracted short attention. Short interest in Rubicon Technology Inc. (NASDAQ: RBCN) fell -2.5%, to 5.46 million shares, but that’s still more than 31% of the float held by shorts. Days to cover is 14. Short interest in Cree Inc. (NASDAQ: CREE) rose 9.2%, to 20.58 million shares, 19.3% of the company’s float. Short interest in Veeco Instruments Inc. (NASDAQ: VECO) fell by -7.7%, to 10.96 million shares, or 27% of the stock’s float.

Turbine maker Capstone Turbine Corp. (NASDAQ) saw short interest rise by just 0.7%, to 42.48 million shares, or 16.5% of float. Days to cover is 18.

Semiconductor equipment makers Applied Materials, Inc. (NASDAQ: AMAT) and GT Advanced Technologies, Inc. (NASDAQ: GTAT) both saw drops in short interest. Applied’s short interest fell to 23 million shares, just 1.8% of its float. GT’s short interest fell to 22.23 million shares, which is 18% of the stock’s float. GT’s days to cover is 18.

Data from Nasdaq and NYSE.

Paul Ausick

Filed under: Alternative Energy, Green Biz, Short Interest Tagged: AMAT, CPST, CREE, ENER, FSLR, GTAT, LDK, RBCN, SPWRA, TSL, TSLA, VECO