Others Added to the NASDAQ Q-50 Besides Facebook (MLNX, NXPI, TWTC)

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When NASDAQ OMX Group Inc.
NDAQ
announced its quarterly reshuffling of the NASDAQ Q-50 Index, what grabbed the attention was that social media giant Facebook
FB
had been added to the list. The index is designed to track the performance of the 50 securities that are next in line to replace the securities currently included in the NASDAQ 100 Index. So it would appear that Facebook is headed for the NASDAQ 100. But Facebook is not alone. Groupon
GRPN
and Western Digital
WDC
were also added to the list. And among the handful of others, perhaps less well known that Facebook or Groupon, are Mellanox Technologies
MLNX
, NXP Semiconductors
NXPI
and TW Telecom
TWTC
.
Mellanox Technologies
This Israeli broad line semiconductor company has a market capitalization of about $4.2 billion. Its PEG ratio and operating margin are higher than the industry averages, and the long-term earnings per share (EPS) forecast is more than 54 percent. The forecast for the current quarter has EPS up 72.5 percent and revenue up 124.6 percent year-over-year. Eleven of the 13 analysts surveyed by Thomson/First Call recommend buying shares; none recommend selling. They believe the stock has room to run, as their mean price target is more than 14 percent higher than the current share price. That share price is more than 200 percent higher year to date, despite pulling back more than eight percent in the past week. Over the past six months, the stock has outperformed competitors such as Broadcom
BRCM
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, as well as the NASDAQ.
NXP Semiconductors
This Dutch technology company has a market cap near $6.6 billion. Here too the PEG ratio and operating margin are higher than the industry averages. The long-term EPS forecast is more than 29 percent, and short interest is less than one percent of the float. Last week the stock hit a 52-week high after company narrowed its third-quarter guidance. Six of nine analysts who follow the stock and were polled by Thomson Reuters rate it as Buy or Strong Buy. Their mean price target is about eleven percent higher than the current share price, as well as higher than the 52-week high. NXP has outperformed peers such as Texas Instruments
TXN
over the past six months, but it underperformed the NASDAQ in that time.
TW Telecom
This telecom is headquartered in Littleton, Colorado, and sports a market cap near $3.9 billion. It has a long-term EPS growth forecast of more than 22 percent, but the price-to-earnings (P/E) ratio is higher than the industry average. Second-quarter revenue exceeded analysts' expectations but EPS fell short. Short interest is about 3.3 percent of the float. Ten of the 17 analysts polled recommend buying shares; none recommend selling. But their mean price target is less than four percent higher than the current share price. Still, year to date, TW Telecom has outperformed larger competitors AT&T
T
and Verizon Communications
VZ
.
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