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Loop Capital Initiated Coverage On 9 Semi Stocks, All With Buy Ratings

Semi Stocks In Focus: Buy Initiations From Loop Capital

Loop Capital’s Betsy Van Hees seems to be bullish on semiconductor sector as she launched coverage of nine stocks all with Buy ratings. Following is a brief overview of her initiation comments on various stocks.

“We believe 2017 and 2018 will be solid years for AMD as the company benefits from 1) return to growth in the server, enterprise, and data center end markets, 2) CPU and GPU market share gains, and 3) continued tailwinds from the console market driving a return to YoY profitability.”

“We believe AVGO will benefit from 1) strong positioning in a diverse set of end markets, 2) operating synergy from its acquisitions, and 3) accretion from the pending acquisition of Brocade.”

In addition, Van Hees expects a beat and raise print from the company’s fourth quarter, set to be reported on December 8.

The analyst believes Cavium should benefit from:

  • “Increasing penetration rates from legacy OCTEON and NITROX product families.”
  • “Robust revenue contributions from new products.”
  • “Strong earnings and cash flow generation from the QLogic acquisition.”

Van Hees said the multiple headwinds are largely behind the company, which is set to benefit from next up-cycle for memory interface, share gains in advanced timing and RF products, and accelerated growth in wireless power.

The analyst believes InvenSense should return to year-over-year growth and profitability in F2018 on strength in the mid- to high-end smartphone market and multiple growth drivers in the Internet-of-Things (IoTs) end market.

“We believe with the worst likely behind INVN and the company’s growth prospects for calendar year 2017 that INVN is a prime target to be acquired,” Van Hees wrote in a note.

Marvell is expected to benefit in F2018 and F2019 from product cycles and pervasive secular trends in cloud computing, Internet-of-Things (IoTs), and infrastructure build-out. Further, better-than-expected cost savings and buybacks should lift the company’s bottom line.

Van Hees expects solid earnings and revenue growth F2017 and into F2018, driven by ongoing manufacturing overhaul, continued diversification in Consumer beyond smartphones, and increased share and content in the automotive and industrial end markets.

Apart from productive acquisitions, the analyst said investors should find confidence in large portion of fixed royalty and licensing revenue, while growth initiatives take hold in 2017 and 2018.

According to Van Hees, the company should witness growth from increasing penetration rates of solid state storage in products such as notebooks, desktops and game consoles; industry transition to 3D NAND from planar NAND; and eMMC controller transition to UFS solutions.

DateFirmActionFromTo
Dec 2016Loop CapitalInitiates Coverage OnBuy
Nov 2016MKM PartnersMaintainsBuy
Oct 2016OppenheimerUpgradesUnderweightPerform

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