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Chips' Flavor Isn't Lasting

The earnings-positive chip and chip-equipment makers with the greatest current P/E discounts and above-average StockScouter scores are listed below. It's not that these are cheap, necessarily, it's just that they're a lot cheaper than they have been.

Chip P/E Discounts: Are They Enough?
Company Name Symbol PE Current PE 1 Yr. Ago 1 Yr. Discount PE 5-Yr Avg. 5 Yr. Discount SS 9/12 Price
QLogic QLGC 21.5 42.8 -49.80% 69.9 -69.20% 10 $29.88
Linear Technology LLTC 35.5 51.9 -31.60 48.4 -26.70 8 36.92
Xilinx XLNX 28.9 81.9 -64.70 -- 8 29.19
Intel INTC 18.7 52.5 -64.40 59.1 -68.40 7 20.80
Analog Devices ADI 27.6 61.4 -55.00 56.6 -51.20 7 37.85
KLA-Tencor KLAC 32.9 80.8 -59.30 44.4 -25.90 7 39.81
Varian Semiconductor VSEA 29.8 127.7 -76.70 -- 7 32.66
Taiwan Semiconductor TSM 22.4 75.5 -70.30 62.9 -64.40 6 7.62
Power Integrations POWI 33 76.3 -56.70 56.6 -41.70 6 22.44
Altera ALTR 33.5 73.2 -54.20 -- 6 20.35
Source: MSN Money

The ones ranked 8 and higher by StockScouter should have at least a fighting chance to sustain any potential near-term rebound over the next six months. Tomorrow I'll focus more on group leader QLogic (QLGC), a maker of devices for storage networking.

At the time of publication, Markman was long QLogic, although positions may change at any time.

Jon D. Markman is publisher of StockTactics Advisor, an independent weekly investment research service, as well as senior strategist and portfolio manager at Pinnacle Investment Advisors. He also writes a weekly column for CNBC on MSN Money. While Markman cannot provide personalized investment advice or recommendations, he welcomes column critiques and comments at

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