Short Interest Rises In Marvell, Falls In Qualcomm (MRVL, QCOM, TXN)
Among the leading semiconductor stocks, Marvell Technology (NASDAQ: MRVL) and Texas Instruments (NASDAQ: TXN) saw significant rises in short interest between the October 15 and October 31 settlement dates.
The number of shares sold short in Advanced Micro Devices (NYSE: AMD), KLA-Tencor (NASDAQ: KLAC), LSI (NASDAQ: LSI), Micron Technology (NASDAQ: MU) and STMicroelectronics (NYSE: STM) also increased during the period.
The short interest in NVIDIA (NASDAQ: NVDA) was essentially unchanged from the previous period.
However, short sellers retreated from Applied Materials (NASDAQ: AMAT), ARM Holdings (NASDAQ: ARMH), Broadcom (NASDAQ: BRCM), Intel (NASDAQ: INTC) and especially from Qualcomm (NASDAQ: QCOM) in late October.
Below we take a closer look at how Marvell Technology, Qualcomm and Texas Instruments have fared and what analysts expect from them.
Short interest in this Bermuda-based company was more than 15 percent higher than in the previous period to more than 12.37 million shares. That was the second highest number of shares sold short so far this year, and it represented more than three percent of the total float. Days to cover was about two.
This integrated circuits maker has a market capitalization of more than $6 billion and a dividend yield near 2.0 percent. There has been some speculation that Marvell could go private. The company has a long-term earnings per share (EPS) growth forecast of about 10 percent.
For at least three months, the consensus recommendation of analysts surveyed by Thomson/First Call has been to hold Marvell Technology shares. Note that the share price has overrun the mean price target. Unless analysts lift their price targets, no further upside potential is indicated.
Shares reached a new 52-week high Wednesday after rising more than 19 percent in the past month. Over the past six months, the stock has outperformed the likes of LSI and Texas Instruments, as well as the Nasdaq and the S&P 500.
Short interest in this San Diego-based company shrank almost 15 percent to about 19.20 million shares in late October. That is the smallest number of shares sold short since July, and it represents about one percent of the float. It would take more than two days to close out all of the short positions.
Qualcomm is expected to post an EPS decline but rising revenue for the current quarter. It has a market cap of about $117 billion and a dividend yield near 2.1 percent. The long-term EPS growth forecast of this S&P 500 component is more than 16 percent, and its return on equity is more than 18 percent.
Of the 43 analysts surveyed, 12 rate the stock at Strong Buy, and another 20 also recommend buying shares. They believe the shares have some room to grow, as their mean price target is about seven percent higher than the current share price. That would be a level the shares have not seen since 2000.
Shares are trading only marginally higher than a month ago, and the share price is less than six percent higher than at the beginning of the year. Over the past six months, the stock has outperformed Broadcom but underperformed Texas Instruments and the Nasdaq.
Short interest in this Dallas-based company swelled more than 11 percent in the latter two weeks of the month to more than 25.69 million shares, or more than two percent of the float. That was the highest level of short interest since March. Days to cover fell from about four to less than three.
During the period, Texas Instruments beat EPS estimates and hiked its dividend. The company has a market cap of more than $45 billion and a dividend yield near 2.9 percent. The long-term EPS growth forecast of this S&P 500 component is about nine percent, and the return on equity is more than 17 percent.
The consensus recommendation of the analysts polled is to hold shares, and it has been for at least three months. It is not much of a surprise then that the share price has overrun their mean price target, which means on average they see no upside potential at this time.
The share price hit a multiyear high at the beginning of November and since has faced resistance around $42. Over the past six months, the stock has outperformed not only competitors Intel and Qualcomm, but the Nasdaq and S&P 500 as well.
At the time of this writing, the author had no position in the mentioned equities.
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