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Short Interest In Altera Rises, In Marvell Tech Falls (ALTR, MRVL, XLNX)

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Among the leading semiconductor stocks, Altera (NASDAQ: ALTR), Marvell Technology (NASDAQ: MU) and Xilinx (NASDAQ: XLNX) saw the most significant swings in short interest between the January 15 and January 31 settlement dates.

The number of shares sold short of Advanced Micro Devices, Applied Materials, ARM Holdings and Maxim Integrated Products increased in that time.

Short sellers retreated from Avago Technologies, Broadcom, Cirrus Logic, Intel, KLA-Tencor, Lam Research, Linear Technology, Micron Technology, NVIDIA, Qualcomm, STMicroelectronics and Texas Instruments in the final two weeks of the month.

Below we take a closer look at how Altera, Marvell Technology and Xilinx have fared and what analysts expect from them.

See also: Five Companies Google Should Acquire Next

Altera

Short interest in this San Jose, California-based company increased more than 26 percent to more than 3.93 million shares in the period, or more than one percent of the float. That ended a four-period slide in the number of shares sold short. The days to cover remained about one.

Altera reported better-than-expected quarterly results during the period. The company has a market capitalization of about $11 billion and a dividend yield near 1.8 percent. This S&P 500 component has a return on equity of about 16 percent and an operating margin that is better than he industry average.

More than half of the 30 analysts surveyed by Thomson/First Call recommend buying shares. Their mean price target, or where analysts expect the share price to go, is more than eight percent higher than the current share price. Note that shares traded higher than that last October.

The share price is up more than nine percent in the past month and poised to break above the 200-day moving average for the first time since October. The stock has not only underperformed the broader markets over the past six months, but competitors Linear Technology and Xlinx as well.

Marvell Technology

Short interest in this Bermuda-based company was about 25 percent lower than in the previous period to nearly 7.44 million shares. That was the smallest number of shares short since last July, and it represented about two percent of the total float. Days to cover was a little more than one.

This integrated circuits maker has a market cap of more than $7 billion and a dividend yield near 1.6 percent. During the period, Marvell lost a plea to reduce $1.1 billion in damages from a patent suit. The company has a long-term earnings per share (EPS) growth forecast of about 10 percent, but the return on equity is about six percent.

For at least three months, the consensus recommendation of analysts surveyed has been to hold Marvell Technology shares. Note that the mean price target is less than the current share price. Unless analysts lift their price targets, no upside potential is indicated at this time.

Shares are trading less than three percent lower than they were a month ago, and the share price is more than 16 percent higher than six months ago. The stock has outperformed not only the likes of Texas Instruments over the past six months, but the Nasdaq and the S&P 500 as well.

Xilinx

The number of shares sold short in this San Jose, California-based integrated circuits maker jumped about 29 percent to more than 16.72 million shares in the period. That was more than six percent of the float, as well as the highest level of short interest since July. The days to cover fell to three.

The company offered disappointing quarterly results and soft guidance during the period. It has a market cap about $13 billion and a dividend yield of about 2.2 percent. The price-to-earnings (P/E) ratio is less than the industry average. The return on equity is more than 19 percent.

The consensus recommendation of the analysts polled has shifted to buying shares in the past month. But they believe the shares have little head room, as their mean price target is about three percent higher than the current share price. That target would be a new multiyear high, though.

The stock is up more than four percent year to date, and more than 27 percent higher than a year ago. It has outperformed competitors Altera and Analog Devices over the past six months. However, it has underperformed the Nasdaq in that time.

See also: Have Investor Sentiments Shifted In 2014?

At the time of this writing, the author had no position in the mentioned equities.

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Posted-In: Advanced Micro Devices altera analog devices applied materials ARM Holdings avago technologiesShort Ideas Trading Ideas Best of Benzinga

 

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