Market Overview

Short Interest in Chip Makers on the Rise

The short interest data is out from the August 31 settlement date. For the big semiconductor makers the results are mixed but overall have trended higher. Shares sold short in AMD (NYSE: AMD), Intel (NASDAQ: INTC), Marvell Technology (NASDAQ: MRVL) and Qualcomm (NASDAQ: QCOM) rose more than nine percent between the August 15 and August 31 settlement dates.

Short interests increased to a lesser degree for Applied Materials (NASDAQ: AMAT), Micron Technology (NASDAQ: MU) and Texas Instruments (NASDAQ: TXN). Bucking the trend, shares sold short in ARM Holdings (NASDAQ: ARMH), Broadcom (NASDAQ: BRCM) and Nvidia Corp. (NASDAQ: NVDA) declined during that time.

Advanced Micro Devices

AMD saw short interest rise 11.7 percent to 110 million shares, or about more than 18 percent of the float. Citigroup downgraded the stock to Neutral today on the shaky outlook for the PC market. This Santa Clara, California-based chip maker has a market capitalization of less than $3 billion, and does not offer a dividend. Its long-term earnings per share (EPS) growth forecast is about 6 percent, and the return on equity is in negative territory. Only 11 of 34 analysts polled by Thomson/First Call recommend buying shares. The share price is down about 28 percent year to date after an more than 10 percent jump in the past week.

Intel

Short interest in Intel increased 15.6 percent to 176 million shares. That represents about 3.5 percent of the float. Intel was also downgraded to Neutral by Citigoup today. This Santa Clara, California-based company sports a market cap of more than $116 billion and offers a dividend yield of about 3.9 percent. Its price-to-earnings (P/E) ratio is about 9.8, less than the industry average. The mean price target of analysts is about 13 percent higher than the current share price. Shares are down less than four percent in the past week, but they have retreated more than 15 percent over the past six months.

Qualcomm

Qualcomm saw short interest rise 9.7 percent, adding to the 15.5 percent increase in the previous period. Some 18.8 million shares sold short as of the August 31 settlement date. The San Diego-based chipmaker and S&P 500 component has a market cap is near $108 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 eight percent higher than the current share price. The share price is up about eight percent in the past 90 days, but still a little lower than six months ago.

Marvell Technology

Marvell posted a whopping 34.4% rise in short interest, to 7.2 million shares. But that is only about 1.6% of the company's float. This Bermuda-based integrated circuit maker was also downgraded to Neutral by a Citi analyst today. It has a market cap of less than $6 billion and offers a dividend yield near 2.3 percent. Marvell fell short of second-quarter estimates and supplied disappointing guidance, prompting the share price to tumble to new 52-week lows. The share price is down about 25 percent year to date and still near those lows. However, 21 of 35 analysts surveyed recommend buying shares, seven of them rating the stock a Strong Buy.

Posted-In: Advanced Micro Devices AMD applied materials ARM Holdings broadcom Citigroup Intel Marvell Technology Micron Technology NVIDIA Qualcomm texas instrumentsLong Ideas Short Ideas Markets Trading Ideas Best of Benzinga

 

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