Investing

Deutsche Bank Has 5 Semiconductor Stocks to Buy for Rest of 2017

Microsemi

This is a company that could benefit from continued industrial demand and is another top pick at Deutsche Bank. Microsemi Corporation (NASDAQ: MSCC) offers a comprehensive portfolio of semiconductor and system solutions for communications, defense & security, aerospace and industrial markets. Products include high-performance and radiation-hardened analog mixed-signal integrated circuits, power management products; timing and synchronization devices and precise time solutions, setting the world’s standard for time; voice processing devices; RF solutions; discrete components; security technologies and scalable anti-tamper products; Ethernet solutions; Power-over-Ethernet ICs and midspans.

While they haven’t actually announced a deal, the company is said to still be running a sale process after receiving takeover interest from Skyworks Solutions Inc. (NASDAQ: SWKS). Microsemi allegedly hired Bank of Montreal last year to run a broader auction after Skyworks offered to buy the company. The process is in the early stages, no deal is imminent, and a transaction may not occur.

The Deutsche Bank price target for this top company is $63, and the consensus is posted at $63.09. The shares closed Tuesday at $51.06.

Maxim Integrated Products

This company supplies some chips to Samsung for the Galaxy line. Maxim Integrated Products, Inc. (NASDAQ: MXIM) designs, develops, manufactures, and markets various linear and mixed-signal integrated circuits worldwide. The company also provides a range of high-frequency process technologies and capabilities for use in custom designs. It primarily serves automotive, communications and data center, computing, consumer, and industrial markets.

This stock has traded down over 10% since early June, and while bouncing back some, it could be a great company to own in front of earnings, which are scheduled for July 20. Maxim Integrated has beaten its earnings projections for each of the last six operational quarters, and is projected to for this quarter as well, according to some analysts.

The Deutsche Bank price target for the shares is $50, while the consensus is at $47.79. The stock closed Tuesday at $46.94.

MaxLinear

This is a smaller cap player that could provide big upside for investors. MaxLinear Inc. (NYSE: MXL) is a global provider of integrated, radio frequency, and mixed-signal integrated circuits and SoCs. The company is a pioneer in multimedia over coax alliance (MoCA) technology and its products serve broadband communications and infrastructure industries, including cable TV, satellite TV, data center, metro, and long-haul optical transport network applications.

The stock is at a discount to peers, and is another company that could be a very viable takeover candidate. In addition, last year MaxLinear formed a partnership with Celeno Communications to jointly developed reference design that combines the best in MoCA and Wi-Fi home network technologies to enable whole home gigabit Wi-Fi.

The Deutsche Bank price target is posted at $33, and the consensus is set higher at $34.67. The stock closed on Tuesday at $26.81.

While many on Wall Street feel the sector still has legs, especially after shares sold off in late May, the current Deutsche Bank concern is well founded. Multiple expansion is only tolerated with earnings and sales expansion. Many stocks now are priced for perfection, and with any earnings or guidance miss, the penalties could be steep.

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