Market Overview

Short Sellers Shy Away from Qualcomm and Texas Instruments

Short Sellers Shy Away from Qualcomm and Texas Instruments

The short interest data is out from the July 31 settlement date. For the big semiconductor makers the results are mixed, although the swings were quite large in some cases. For instance, the number of shares sold short in Intel Corp. (NASDAQ: INTC) and Micron Technology Inc. (NASDAQ: MU) rose more than 12 percent since the July 13 settlement date. Short sellers shied away from the following big chip makers in particular.

Broadcom Corp.

Broadcom (NASDAQ: BRCM) saw short interest fall 6.6 percent to 7.05 million shares. That was the third straight decline since a jump of nearly 41 percent in mid-June. The Irvine, Calif.-based developer of semiconductors for wired and wireless communications has a market capitalization of more than $19 billion and a dividend yield of more than 1 percent. Its long-term earnings per share (EPS) growth forecast is 15.4 percent, and the mean price target of analysts is about 14 percent higher than the current share price and also higher than the 52-week high.

Nvidia Corp.

Short interest in Nvidia (NASDAQ: NVDA) dropped 10.3 percent to 10.93 million shares, though that is still about 18 percent higher than the 2012 low of 8.9 million shares in mid-June. The analysts' mean price target is more than 10 percent higher than the current share price. This Santa Clara, Calif.-based maker of graphics chips is an S&P 500 component with a market cap around $9 billion. Its long-term EPS growth forecast is more than 13 percent. It beat consensus estimates for both the top line and bottom line when it announced its quarterly results last week.

Qualcomm Inc.

Qualcomm (NASDAQ: QCOM) saw short interest dip 10.5 percent to 14.8 million shares, the lowest total for the San Diego-based chipmaker since mid-March. The market cap is near $105 billion and the S&P 500 component has a dividend yield of about 1.6 percent. Its return on equity is about 17.5 percent. The mean target price is almost 11 percent higher than the current share price, as well as higher than the 52-week high. The share price has jumped about 14 percent in the past month, and 39 out of 45 analysts polled by Thomson First Call recommend buying shares.

Texas Instruments Inc.

Short interest in Texas Instruments (NASDAQ: TXN) declined the most of this group -- down 20 percent to 16.4 million shares. That was the biggest drop in short interest since the end of January. This Dallas-based company makes semiconductors for electronics designers and manufacturers worldwide. It too is an S&P 500 component, and it has a market cap near $33.8 billion and a dividend yield of about 2.4 percent. The share price is more than 10 percent higher than on July 23, when Texas Instruments reported lower but better-than-expected EPS.

See also: Qualcomm Appoints Chief Marketing Officer and Texas Instruments Announces Proposed Offering of $1B Notes

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