Technology

JPMorgan Makes Winning Calls, Says Continue to Buy Chip Stocks

If there is any place in the world where past calls are rewarded if they are good, it’s Wall Street, and with good reason. The top firms that we cover here at 24/7 Wall St. are constantly tasked with making individual stock and sector calls. The kudos goes to the calls that are made in front of stocks or sector moves, not after the fact when the outcome is already known, like the new downgrades of Wal-Mart.

In a new report, JPMorgan takes a very well-deserved victory lap as the firm came out in early September and not only said buy the chip sector, but it upgraded two stocks that have made significant moves. We screened the firm’s chip coverage universe and found four Overweight rated companies that look solid.

Microchip Technology

This company is a huge Internet of Things benefactor. Microchip Technology Inc. (NASDAQ: MCHP) is a leading provider of microcontroller, mixed-signal, analog and flash-IP solutions, providing low-risk product development, lower total system cost and faster time to market for thousands of diverse customer applications worldwide. The company offers 8-bit, 16-bit and 32-bit microcontrollers under the PIC brand name, and 16-bit dsPIC digital signal controllers, as well as provides microcontrollers for automotive networking, computing, lighting, power supplies, wireless communication and wireless audio applications.

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The company announced recently that its MOST 50 Intelligent Network Interface Controllers (INICs) are powering the infotainment systems of the new Toyota Alphard executive-lounge hybrid vehicles. This is the latest deployment among a wide variety of the Toyota’s brands, which have used MOST50 in their infotainment systems for many years, including both volume and luxury vehicles. In the new Alphard implementation, Toyota is using MOST technology to ensure high-quality digital audio streaming throughout the vehicle.

MicroChip investors are paid a very solid 3% dividend. The JPMorgan price target for the stock is $54, and the Thomson/First Call consensus price objective is $49.20. The stock closed most recently at $47.31 up over 3%.