15 Technology Stock Ideas For a January Effect Trade
15 companies worth a look when planning for January.
This list is in no way all inclusive and in fact there are possibly hundreds of stocks currently experiencing very heavy year-end selling, with little to no deterioration in fundamentals. I did try to limit the list to companies with high cash per share and/or book value. If possible I tried to include the niche leader in its respective space.
SiRF Technology Holdings (SIRF): GPS chips are going to be infused into more cell phones almost every quarter over the coming two years. SIRF and Broadcom (BRCM) will own this growth.
RF Micro Devices (RFMD): This is a very cheap high quality cellular chip maker. Recent results were solid even with a weak Motorola (MOT) in the picture. Any improvement with MOT and this stock could easily see much higher prices.
Spansion (SPSN): Yes, the Dram end markets are terrible. Yes, the stock is a money losing EPS machine. Yes, I think it can work quite a bit higher for a seasonal trade. Long term issues may have bottomed but that's a very tough call in this industry.
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Opnext (OPXT): One of my favorite stocks in the optical component sector, it has great revenue growth and strong product cycle. Frankly, it's a mystery how this stock is this cheap.
Finisar (FNSR): This is a very touchy stock which just bounced hard then traded to new lows on an improving quarter off an already decimated base. OPXT could prove to be a tough competitor but FNSR has managed to survive and even thrive at times since bottoming in 2002. Odds are it will have the products to match strong growth in industry end markets for optical components.
QLogic (QLGC): The stock has been very undervalued most of year, holding of late but has pulled back after stronger recent results
Infinera (INFN): Most everyone who bought the secondary has probably tossed away their shares for losses. This could prove to be a costly sell if the stock get back to highs or breaks through to new highs, which I fully expect.
DSP Group (DSPG): This stock is a great example of the stealth bear market underlying the Naz, moving all the way back to 2002 levels. The stock moved higher on merger announcement months ago and has steadily fallen lower since. It has a strong balance sheet and is selling below book value.
Mentor Graphics (MENT): This company is similar to many above. Its business is not falling off a cliff and it reaffirmed its '08 outlook. The stock is relentlessly trending lower.
MIPS Technologies (MIPS): This IP chip company sells building blocks to many larger chip companies. On the last couple of conference calls management has talked about the strength of its business being as solid as any time in its history.
ValueClick (VCLK): Many merger rumors have come and gone with it, leaving many a frustrated long to sell the stock for tax losses at year end.
PMC-Sierra (PMCS): This communication and storage chip maker has reported a string of improving quarters, which has done little for the stock price.
Avocent (AVCT): This IT infrastructure provider has gotten crushed after a moderately downbeat forecast on its last call. The company increased its buyback in November to no avail thus far. It's very cheap at current levels.
Jabil Circuit (JBL): This is an EMS company that I've highlighted before on the Buzz, with multi-year lows on many valuation metrics. Recent analyst commentary has highlighted its valuation case.
AVX (AVX): This company is a diode and capacitor maker. This old school tech name has been through many difficult markets and cycles and has a very solid management team and balance sheet. The stock is priced for recession: If we don't have one it could be a steal from year end structural selling pressures.
Lastly, a few more names fitting the above profile would include InterDigital (IDCC), Brooks Automation (BRKS), Kulicke & Soffa Industries (KLIC), Acme Packet (APKT), Cray (CRAY) and Brocade (BRCD).
If there are other stocks you want to drop me a question on please do so and I will do my best to answer as many emails as possible.
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