Short Interest Swings In Semiconductor Stocks (BRCM, MXIM, MU)
Among the leading semiconductor stocks, Broadcom (NASDAQ: BRCM), Maxim Integrated Products (NASDAQ: MXIM) and Micron Technology (NASDAQ: MU) saw the most significant swings in short interest between the December 13 and December 31 settlement dates.
The number of shares sold short of Applied Materials, ARM Holdings, Cirrus Logic, KLA-Tencor, Lam Research, Linear Technology, Marvell Technology, NVIDIA, Qualcomm and Xilinx increased somewhat in that time.
STMicroelectronics and Texas Instruments saw little change from the previous settlement date. But short sellers retreated from Advanced Micro Devices, Altera, Avago Technologies and Intel in the final weeks of the year.
Below we take a closer look at how Broadcom, Maxim Integrated Products and Micron Technology have fared and what analysts expect from them.
Short interest in this Irvine, California-based company decreased more than 16 percent to more than 10.51 million shares in the period, or about two percent of the float. That was the smallest number of shares sold short since last August. The days to cover was still less than two.
Broadcom lifted its fourth-quarter guidance in December due to higher-than-expected sales. The company has a market capitalization of more than $16 billion and a dividend yield near 1.5 percent. The long-term earnings per share (EPS) growth forecast of this S&P 500 component is more than eight percent.
Of the 45 analysts surveyed by Thomson/First Call, 11 rate the stock at Strong Buy and another 16 also recommend buying shares. They see little room for shares to run, as their mean price target is less than five percent higher than the current share price. Shares traded higher than that last summer.
The share price is up about two percent in the past month, but still about 17 percent lower than six months ago. The stock has not only underperformed the broader markets over the past six months, but larger competitors Qualcomm and Texas Instruments as well.
Maxim Integrated Products
The number of shares sold short in this San Jose, California-based company jumped about 33 percent to more than 5.27 million shares in the final weeks of December. That was about two percent of the float, as well as the highest level of short interest since the end of October. The days to cover was almost two.
The chief technology officer sold 200,000 shares in December. The company has a market cap near $18 billion and a dividend yield of about 3.7 percent. The price-to-earnings (P/E) ratio is less than the industry average. The return on equity is about 17 percent, and the operating margin is greater than the industry average.
The consensus recommendation of the analysts polled is to hold shares, and it has been for at least three months. They believe the shares have some room to run, as their mean price target is about 11 percent higher than the current share price. That target is less than the 52-week high, though.
The stock has pulled back about two percent in the past week and shares are trading in the same neighborhood as they were six months ago. It has underperformed Analog Devices and the Nasdaq over the past six months, but it also outperformed STMicroelectronics in that time.
This Boise-based semiconductor device maker saw short interest shrink more than 12 percent to around 115.13 million shares, which was about 11 percent of the float. That followed a narrower decline in the previous period. It would take more than three days to close out all of the short positions.
Micron Technology was a rumored takeover target, and it appointed a new general counsel during the period. The company has a market cap of more than $25 billion. The P/E ratio is less than the industry average, but the long-term EPS growth forecast of this S&P 500 component is less than six percent.
Of the 31 analysts who were surveyed, 15 recommend buying shares, with eight of them rating the stock at Strong Buy. Their mean price target indicates more than 12 percent potential upside, relative to the current share price. Shares have not traded at that level since 2002.
The stock hit a new multiyear high last week. The share price is almost 87 percent higher than past six months ago. Micron Technology has outperformed the Nasdaq and the Dow Jones Industrial Average in that time.
At the time of this writing, the author had no position in the mentioned equities.
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