|Written by GSCR Staff|
|Tuesday, 11 June 2013 08:04|
In Monday’s Goldman Guide we discussed the consumer oriented gadget and technology focused millennial generation and investing ideas related to the tastes of this group. One sector that is at the core of technology is the semiconductor industry, where there are a large number of players in the small cap universe.
Back in early April we highlighted RF Micro Devices (NASDAQ – RFMD - $5.28) at a price of $5.19 and a $7.00 target for sometime by the end of 2Q13. The stock has not been able to break through the $6.00 level but we still like the story.
As a refresher, the company designs, develops, manufactures, and markets radio frequency (RF) components and compound semiconductor technologies primarily in the United States and Asia. Its products are targeted at the 4G LTE mobile smartphones, wireless infrastructure, wireless local area networks, cable television /broadband, Smart Energy/advanced metering infrastructure and aerospace and defense markets.
RF continues to innovate in all product areas. Recently, the company introduced the RFHA1027, a gallium nitride (GaN) matched power transistor (MPT) that will deliver industry-leading pulse power performance of 500W in a compact flanged package, very useful in applications like tablets and smartphones. The firm was spending over 20% of total sales in research and development for several consecutive quarters finally tapering off in 2013, but still aggressively spending over 15% of sales on new products and programs related to R&D.
RFMD has a forward 12-month P/E under 10, and indication of a great value at the current price levels and forecasts. The charts remain somewhat bearish side, but we think the fundamentals outweigh this indication. The stock may not reach the $7.00 mark by the end of 2Q13, which is in 20 days, but we still like that target for year-end 2013.
Have a great day.
Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.
This Market Monitor blog was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research, which typically highlights small cap companies, and Goldman Opportunity Research, which features micro cap companies in a sponsored research format. Thus, the Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports.
It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.
The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.
This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.
ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.
For more information, visit our Disclaimer: www.goldmanresearch.com