We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
5 Top-Ranked Semiconductor Stocks For a Winning Portfolio
Read MoreHide Full Article
Semiconductors are the building block of the technology sector as these find application in most of the day-to-day human requirements ranging from electronic gadgets to cars, planes and advanced weaponry.
Robust demand for memory chips and other semiconductor products owing to the rapid adoption of cloud, Internet of Things (“IoT”), autonomous cars, advanced driver assisted systems (“ADAS”), gaming, wearables, drones, virtual reality/ augmented reality (“VR/AR”) devices, artificial intelligence (“AI”), and cryptocurrencies are fueling massive growth in the space.
The accelerated deployment of 5G technology —the next-generation wireless revolution —is likely to spur further growth. Additionally, positive trends in overall IT spending and improving PC shipments are encouraging.
In fact, dynamic innovation in semiconductors enables the emerging technologies to become a reality. Semiconductors are setting the pace for technology modernization, consequently digitizing aspects like healthcare, transport, financial systems, defense, agriculture, and retail, among others.
The iShares PHLX Semiconductor ETF (SOXX - Free Report) follows the PHLX SOX Semiconductor Sector Index and offers exposure to 30 firms. It has rallied 8.9% year to date. Further, SPDR S&P Semiconductor ETF (XSD - Free Report) tracks the S&P Semiconductor Select Industry Index, which comprises 36 stocks. It has gained 9% year to date.
Making the Right Choice
The aforementioned factors strengthen our view that this is the right time to invest in semiconductor stocks. Investors looking for exposure in the semiconductor industry have a number of options. However, picking the right stocks is a difficult task.
It is here that the Zacks Style Score System can come in handy. Back-tested results show that stocks with VGM Style Scores of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) handily outperform other stocks.
Key Picks
Here, we zero in on five semiconductor players that have the favorable combination:
KLA-Tencor Corporation (KLAC - Free Report) is expected to benefit from ongoing technology transitions (FinFET, 3D NAND, TSV and multi-patterning) in the semiconductor industry. Further, the demand for greater densities and efficiencies within chip packages are increasing complexities of semiconductor devices, which will continue to drive adoption of its yield management solutions.
Milpitas, CA-based KLA-Tencor has beaten the Zacks Consensus Estimate in the preceding four quarters with an average positive surprise of 7.7%. The company is witnessing impressive northbound estimate revisions — up 42 cents to $9.28 per share for the current year in the last 60 days. Moreover, the company has a long term earnings growth rate of 9.8%.
Vishay Intertechnology, Inc. (VSH - Free Report) is well positioned to gain from rapid adoption of its broad-based portfolio ranging from smart appliances, fitbands to biometric monitoring systems. Its IoT-based portfolio comprising sensors, actuators, gateways and routers remain key catalysts.
Headquartered in Malvern, PA, Vishay pursues an active acquisition strategy which aids in product portfolio expansion.
Vishay has an average positive surprise of 6.5% in the trailing four quarters. The company is witnessing impressive northbound estimate revisions — up 22 cents to $2 per share for the current year in the last 60 days. Further, the company has a long term earnings growth rate of 9.2%.
Shares of Vishay have returned 11.6% year to date. The company has a VGM Score of B and a Zacks Rank #1.
Qorvo, Inc. (QRVO - Free Report) is well poised to gain from increasing demand of its performance-tier for radio frequency (“RF”) Fusion based solutions as well as for antenna tuning, discrete components and Bulk Acoustic Wave (“BAW”) based multiplexers. Expanding 5G and GaN (Gallium nitride) solutions portfolio hold promise.
Greensboro, NC -based Qorvo has beaten the Zacks Consensus Estimate in the preceding four quarters delivering an average positive surprise of 9.9%. The company is witnessing impressive northbound estimate revisions — up 28 cents to $6.20 per share for the current year in the last 60 days. Moreover,the company has a long term earnings growth rate of 11.9%.
Shares of Qorvo have returned 21.1% year to date. The company has a VGM Score of B and a Zacks Rank #2.
Cypress Semiconductor Corporation is also looking good, given its solid wireless solutions business. Improving demand for programmable system-on-chip (“PSoC”) products and company’s focus on delivering embedded solutions to the consumer, automotive and industrial customers, positions it well in the industry.
Cypress Semiconductor Corporation Price and Consensus
San Jose, CA-based Cypress has beaten the Zacks Consensus Estimate in the preceding four quarters with an average positive surprise of 13.9%. The company is witnessing impressive northbound estimate revisions — up 9 cents to $1.34 per share for the current year in the last 60 days. Further, the company has a long term earnings growth rate of 16.1%.
Shares of Cypress have returned 11.1% year to date. The company has a VGM Score of B and a Zacks Rank #2.
Texas Instruments Incorporated (TXN - Free Report) is expected to benefit from strong demand particularly in high-margin auto and industrial businesses. The higher mix of analog and embedded processing products along with growing 300-millimeter analog output is anticipated to boost margin expansion.
Texas Instruments Incorporated Price and Consensus
Dallas, TX-based Texas Instruments has registered an average positive surprise of 5.4%in the trailing four quarters. The company is witnessing impressive northbound estimate revisions — up 17 cents to $5.66 per share for the current year in the last 60 days. Moreover, the company has a long term earnings growth rate of 9.5%.
Shares of Texas Instruments have returned 9.2% year to date. The company has a VGM Score of B and a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early. See Zacks' 3 Best Stocks to Play This Trend >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
5 Top-Ranked Semiconductor Stocks For a Winning Portfolio
Semiconductors are the building block of the technology sector as these find application in most of the day-to-day human requirements ranging from electronic gadgets to cars, planes and advanced weaponry.
Robust demand for memory chips and other semiconductor products owing to the rapid adoption of cloud, Internet of Things (“IoT”), autonomous cars, advanced driver assisted systems (“ADAS”), gaming, wearables, drones, virtual reality/ augmented reality (“VR/AR”) devices, artificial intelligence (“AI”), and cryptocurrencies are fueling massive growth in the space.
The accelerated deployment of 5G technology —the next-generation wireless revolution —is likely to spur further growth. Additionally, positive trends in overall IT spending and improving PC shipments are encouraging.
In fact, dynamic innovation in semiconductors enables the emerging technologies to become a reality. Semiconductors are setting the pace for technology modernization, consequently digitizing aspects like healthcare, transport, financial systems, defense, agriculture, and retail, among others.
The iShares PHLX Semiconductor ETF (SOXX - Free Report) follows the PHLX SOX Semiconductor Sector Index and offers exposure to 30 firms. It has rallied 8.9% year to date. Further, SPDR S&P Semiconductor ETF (XSD - Free Report) tracks the S&P Semiconductor Select Industry Index, which comprises 36 stocks. It has gained 9% year to date.
Making the Right Choice
The aforementioned factors strengthen our view that this is the right time to invest in semiconductor stocks. Investors looking for exposure in the semiconductor industry have a number of options. However, picking the right stocks is a difficult task.
It is here that the Zacks Style Score System can come in handy. Back-tested results show that stocks with VGM Style Scores of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) handily outperform other stocks.
Key Picks
Here, we zero in on five semiconductor players that have the favorable combination:
KLA-Tencor Corporation (KLAC - Free Report) is expected to benefit from ongoing technology transitions (FinFET, 3D NAND, TSV and multi-patterning) in the semiconductor industry. Further, the demand for greater densities and efficiencies within chip packages are increasing complexities of semiconductor devices, which will continue to drive adoption of its yield management solutions.
KLA-Tencor Corporation Price and Consensus
KLA-Tencor Corporation Price and Consensus | KLA-Tencor Corporation Quote
Milpitas, CA-based KLA-Tencor has beaten the Zacks Consensus Estimate in the preceding four quarters with an average positive surprise of 7.7%. The company is witnessing impressive northbound estimate revisions — up 42 cents to $9.28 per share for the current year in the last 60 days. Moreover, the company has a long term earnings growth rate of 9.8%.
Shares of KLA-Tencor have returned 10.6% year to date. The company has a VGM Score of B and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Vishay Intertechnology, Inc. (VSH - Free Report) is well positioned to gain from rapid adoption of its broad-based portfolio ranging from smart appliances, fitbands to biometric monitoring systems. Its IoT-based portfolio comprising sensors, actuators, gateways and routers remain key catalysts.
Headquartered in Malvern, PA, Vishay pursues an active acquisition strategy which aids in product portfolio expansion.
Vishay Intertechnology, Inc. Price and Consensus
Vishay Intertechnology, Inc. Price and Consensus | Vishay Intertechnology, Inc. Quote
Vishay has an average positive surprise of 6.5% in the trailing four quarters. The company is witnessing impressive northbound estimate revisions — up 22 cents to $2 per share for the current year in the last 60 days. Further, the company has a long term earnings growth rate of 9.2%.
Shares of Vishay have returned 11.6% year to date. The company has a VGM Score of B and a Zacks Rank #1.
Qorvo, Inc. (QRVO - Free Report) is well poised to gain from increasing demand of its performance-tier for radio frequency (“RF”) Fusion based solutions as well as for antenna tuning, discrete components and Bulk Acoustic Wave (“BAW”) based multiplexers. Expanding 5G and GaN (Gallium nitride) solutions portfolio hold promise.
Qorvo, Inc. Price and Consensus
Qorvo, Inc. Price and Consensus | Qorvo, Inc. Quote
Greensboro, NC -based Qorvo has beaten the Zacks Consensus Estimate in the preceding four quarters delivering an average positive surprise of 9.9%. The company is witnessing impressive northbound estimate revisions — up 28 cents to $6.20 per share for the current year in the last 60 days. Moreover,the company has a long term earnings growth rate of 11.9%.
Shares of Qorvo have returned 21.1% year to date. The company has a VGM Score of B and a Zacks Rank #2.
Cypress Semiconductor Corporation is also looking good, given its solid wireless solutions business. Improving demand for programmable system-on-chip (“PSoC”) products and company’s focus on delivering embedded solutions to the consumer, automotive and industrial customers, positions it well in the industry.
Cypress Semiconductor Corporation Price and Consensus
Cypress Semiconductor Corporation Price and Consensus | Cypress Semiconductor Corporation Quote
San Jose, CA-based Cypress has beaten the Zacks Consensus Estimate in the preceding four quarters with an average positive surprise of 13.9%. The company is witnessing impressive northbound estimate revisions — up 9 cents to $1.34 per share for the current year in the last 60 days. Further, the company has a long term earnings growth rate of 16.1%.
Shares of Cypress have returned 11.1% year to date. The company has a VGM Score of B and a Zacks Rank #2.
Texas Instruments Incorporated (TXN - Free Report) is expected to benefit from strong demand particularly in high-margin auto and industrial businesses. The higher mix of analog and embedded processing products along with growing 300-millimeter analog output is anticipated to boost margin expansion.
Texas Instruments Incorporated Price and Consensus
Texas Instruments Incorporated Price and Consensus | Texas Instruments Incorporated Quote
Dallas, TX-based Texas Instruments has registered an average positive surprise of 5.4%in the trailing four quarters. The company is witnessing impressive northbound estimate revisions — up 17 cents to $5.66 per share for the current year in the last 60 days. Moreover, the company has a long term earnings growth rate of 9.5%.
Shares of Texas Instruments have returned 9.2% year to date. The company has a VGM Score of B and a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>