Market Overview

Short Interest Plunges In Altera And Marvell Tech (ALTR, MRVL, XLNX)

Short Interest Plunges In Altera And Marvell Tech ALTR, MRVL, XLNX
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Among the leading semiconductor stocks, Altera (NASDAQ: ALTR), Marvell Technology (NASDAQ: MRVL) and Xilinx (NASDAQ: XLNX) saw the most significant downswings in short interest between the March 31 and April 15 settlement dates.

Short sellers also retreated from Applied Materials, ARM Holdings, Avago Technologies, Intel, KLA-Tencor, Micron Technology, NVIDIA, Qualcomm and Texas Instruments in the first two weeks of the month.

Short interest in Cirrus Logic, Lam Research and Linear Technology was essentially the same as in the previous period. The number of shares sold short of Advanced Micro Devices, Broadcom, Maxim Integrated Products and STMicroelectronics increased during the period.

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

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Altera

Short interest in this San Jose, California-based company decreased about 22 percent to more than 5.16 million shares in the period. That was more than one percent of the float, as well as the lowest number of shares short since January. It would take less than two days to cover all short positions.

Altera reported better-than-expected quarterly results, but after period ended. The company has a market capitalization of less than $11 billion and a dividend yield near 1.7 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 27 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 15 percent higher than the current share price. Shares have not traded in that neighborhood since last September.

The share price is down almost eight percent in the past month and currently well below the 50-day and the 200-day moving averages. 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 more than 66 percent lower than in the previous period, falling from more than 10.41 million to nearly 3.49 million shares. That was the smallest number of shares short in at least a year, and it represented about one percent of the total float.

This integrated circuits maker has a market cap of about $8 billion and a dividend yield near 1.5 percent. During the period, Marvell was ordered to pay $1.5 billion in damages from a patent suit. The company has a long-term earnings per share (EPS) growth forecast of more than 11 percent, but the return on equity is about seven percent.

For at least three months, the consensus recommendation of analysts surveyed has been to hold Marvell Technology shares. Note that a move to their mean price target would be a gain of less than four percent for shareholders. That target also is less than the recent 52-week high.

Shares are trading about 12 percent higher than they were at the beginning of the year, and they are up more than 32 percent from 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.

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Xilinx

The number of shares sold short in this San Jose, California-based integrated circuits maker tumbled about 39 percent to around 5.13 million shares in the period. That was about two percent of the float, as well as the lowest level of short interest in a least a year. The days to cover fell to less than two.

The consensus analyst forecast so far calls for more than 58 percent revenue growth for the current fiscal year. The company has a market cap less $13 billion and a dividend yield of about 2.2 percent. The forward earnings multiple is less than the trailing price-to-earnings (P/E) ratio. The return on equity is more than 19 percent.

For at least three months, the consensus recommendation of the analysts polled has been to buy shares. A recent pull back leaves plenty of head room for shares, as the analysts' mean price target is about 13 percent higher than the current share price. That target is less than the recent 52-week high, though.

The stock is down about 12 percent in the past month but still about four percent higher year to date. The 200-day moving average acted as support last week. The stock has underperformed competitor Analog Devices over the past six months. However, it has outperformed Altera and the Nasdaq in that time.

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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