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NXP SEMI: Swinging Wild But Solid In The Near Field

A Preston Clive Stock Review

NXP Semiconductors (NASDAQ:NXPI) has been providing investors who have jumped in for the ride on their stocks with a wild series of peaks and dips over the past couple of days--classic roller-coaster stuff. The Street has just reported within the past hour or so that Trade Ideas LLP has tagged NXP as a "perilous reversal" meaning that the stock has been swinging from the chandeliers at the moment. TradeIdeas gave it this tag, according to the article, based on the following criteria:

  • NXPI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $322.7 million.
  • NXPI has traded 687,402 shares today.
  • NXPI is down 3.1% today.
  • NXPI was up 5.1% yesterday.

Most observers rate the stock as a solid buy (including thestreet.com). According to thestreet:

NXPI has a PE ratio of 42.3. Currently there are 11 analysts that rate NXP Semiconductors a buy, no analysts rate it a sell, and 2 rate it a hold.

That's a pretty firm outlook according to anybody's playbook. Close examination of earnings reveal very strong revenue growth, strong share earnings, good yields on equity, scaling in net income and solid liquidity flowing in from operations.

As for the organization itself, it is a Dutch semiconductor and chipset company that has roots going back to 1953. The true foundation was initiated when the board for Philips Electronics decided that they wanted to start a semiconductor operation, and did so there in the Netherlands. Thusly, the company was originally operating under the name of Philips Semiconductors; this entity was then sold to a group of private financiers in the year 2006, with a name shift to NXP .  .  .  which apparently was meant to signify Next Experience.

One of the company's bigger, modern claims to fame is that it co-invented (with Sony Electronics) the technology of NFC--Near Field Communication. This is of course the technology in your smartphone that allows you to Tap & Pay with your credit card in stores, bump other phones and trade data and media. It also provides chipsets for vehicles which allow for in-vehicle networking, keyless entry and immobilization technologies, and radios.

NXP maintains a revenue growth which outpaces the industry standard by just shy of 10% (the number is 9.8%). Clearly impressive. Company revenues versus one year prior have risen 18.9%. Rather solid, despite the wilding of company stock over the past couple of trading days. If you would like to read a transcript of last week's Q4 earnings report you can click here.

More on the stock and the company via WhoTrades friend and commentator Marc Eisen at Chaikin Analytics.

Preston Clive

2/9/2015***