Market Overview

Short Interest in Semiconductor Makers on the Rise

The short interest data is out from the August 15 settlement date. For the big semiconductor makers the results are mixed but overall trended higher. Shares sold short in Applied Materials (NASDAQ: AMAT), ARM Holdings (NASDAQ: ARMH) Qualcomm (NASDAQ: QCOM) and Texas Instruments (NASDAQ: TXN) rose more than 12 percent since the July 31 settlement date. Short interest also rose in Advanced Micro Devices (NYSE: AMD), Broadcom (NASDAQ: BRCM), and Intel (NASDAQ: INTC).

Applied Materials

Applied Materials saw short interest rise 34.4 percent to 17.6 million shares, or about 1.4 percent of the float. The chip maker lowered its sales forecast about when it released data for the most recent quarter. The Santa Clara, California-based company has a market capitalization of more than $14 billion, and its dividend yield is more than 3 percent. Its long-term earnings per share (EPS) growth forecast is 9.2 percent, and the mean price target of analysts is more than 10 percent higher than the current share price. Shares are trading up about 9 percent year to date.

ARM Holdings

Short interest in ARM Holdings increased 17.0 percent to 6.9 million shares. That represents about 1.5 percent of the float. The analysts' mean price target is more than 8 percent higher than the current share price. This U.K. company designs microprocessors and has a market cap of more than $12 billion. Its long-term EPS growth forecast is more than 18 percent and the dividend yield is about 0.6 percent. ARM Holdings faces increasing competition from much larger Intel, which is moving into the mobile market in search of growth it can no longer find in the PC market.

Qualcomm Inc.

Qualcomm saw short interest rise 15.5 percent, reversing a dip of 10.5 percent in the previous period. Some 15.5 million shares sold short as of the August 15 settlement date. The San Diego-based chipmaker and S&P 500 component has a market cap is near $106 billion and a dividend yield of about 1.6 percent. Its return on equity is about 17.5 percent and the operating margin is better than the industry average. The mean target price is more than 10 percent higher than the current share price, as well as higher than the 52-week high. The share price is up about 5 percent in the past month, and 39 out of 46 analysts polled by Thomson/First Call recommend buying shares.

Texas Instruments

Short interest in Texas Instruments was up 12.2 percent, following a decline of 20 percent in the previous period. Some 18.4 million shares sold short as of the August 15 settlement date. 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 of more than $34 billion and a dividend yield near 2.3 percent. Both per-share earnings and revenues are expected to have declined from a year ago when Texas Instruments reports results for the current quarter.

See also: Qualcomm Acquires Small Cell Pioneer DesignArt Networks and Applied Materials Posts 54% Drop in FQ3 Earnings

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