Market Overview

Six Semiconductor Stocks Trading Near 52-Week Highs

Novellus Systems (NASDAQ: NVLS) is scheduled to report its second-quarter 2011 results Monday after the closing bell, offering an early peek at what to expect from coming earnings from semiconductor companies. Analysts expect to see Novellus's per-share earnings up nearly 12% from a year ago but down about 27% from the previous quarter.

While Novellus does not make the following list, here are six semiconductor stocks that are trading in the neighborhood of their 52-week highs.

Avago Technologies (NASDAQ: AVGO): After recent meetings with Avago management, Citigroup raised its price target on the stock and Kaufman Brothers forecast a stronger second half 2011 for the company. The dividend yield is 0.8% and the long-term EPS growth forecast is 12.1%. The share price is more than 33% higher than at the beginning of the year. The stock has outperformed competitor Analog Devices (NYSE: ADI) and the industry average in that time.

Cypress Semiconductor (NASDAQ: CY): Cypress was recently named a top pick by Collins Stewart, and the company is expected to post year-over-year earnings and revenue growth on July 21. Analysts on average underestimated per-share earnings in the past five quarters, and the long-term EPS growth forecast is 16.1%. The stock appears poised to recapture the 52-week high of $23.95 per share from back in May; the share price is up more than 25% year to date.

EZchip Semiconductor (NASDAQ: EZCH): After seeing record revenues in the fourth quarter, EZchip reported disappointing revenue results in the first quarter, but expects the launch of its NP-4 to help it regain momentum. The long-term EPS growth forecast is 24.6%. The share price is more than 33% higher year to date; the stock has outperformed competitor Broadcom (NASDAQ: BRCM) and the semiconductor equipment industry average, as well as the broader markets, in that time.

Intel (NASDAQ: INTC): Intel seems poised to benefit from corporations that can no longer delay enterprise equipment purchases, as well as Japanese companies rebuilding following the earthquake and tsunami in March. Intel has a dividend yield of 2.9% and a return on equity of 24.4%. The share price is nearly 12% higher than six months ago. The stock has outperformed competitors Advance Micro Devices (NYSE: AMD) and Texas Instruments (NYSE: TXN) in that time.

Varian Semiconductor Equipment (NASDAQ: VSEA): Applied Materials (NASDAQ: AMAT) agreed to acquire Varian back in May, and Varian is expected to post 40% EPS and revenue growth in its July 28 quarterly report. Short interest has risen since the takeover announcement and is now 3.7% of the float. The share price recently hit a multiyear high of $62.00 and ended last week more than 66% higher than at the beginning of the year.

Xlinx (NASDAQ: XLNX): This maker of programmable logic devices reported record revenue results for fiscal 2011, and its CFO recently bought 14,500 shares. Xilinx has a dividend yield of 1.8% and a return on equity of 15.0%. The long-term earnings per share growth forecast is 12.2%. Its P/E ratio is less than the industry average. Shares reach a multiyear high of $37.37 last week. The stock has outperformed its industry average, but underperformed rival Altera (NASDAQ: ALTR) year to date.

Action Items:

Bullish: Traders optimistic about the semiconductors industry also might want to consider the following trades:

  • PowerShares Dynamic Semiconductors Portfolio (NYSE: PSI)
  • SPDR S&P Semiconductor ETF (NYSE: XSD)
  • ProShares Ultra Semiconductors (NYSE: USD)

Bearish: Traders pessimistic about the semiconductors industry may want to consider these alternate positions:

  • ProShares UltraShort Semiconductors (NYSE: SSG)
  • Direxion Daily Semiconductor Bear 3x Shares (NYSE: SOXS)

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

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