Mad Money Spotlight: ON Semiconductor

Investing in semiconductor companies is partly about timing the boom-bust cycles that the industry is as susceptible to as Silicon Valley is to earthquakes.

To that end, the ongoing slump in the microchip business hasn't left ON Semiconductor(ONNN Quote) unscathed. The company lost money in its most recent quarter -- to the tune of 8 cents a share. The mid-size maker of power-management parts for a wide range of electronic devices also recently laid off 1,500 workers, and commenced a series of factory shutterings.

And yet...shares of ON have surged 65% year-to-date, and they continued to rise as much as 6% Monday morning, suggesting that investors are looking for a chip turnaround, especially after company executives gave revenue targets for the second quarter (a range from $395 million to $410 million) that were above Wall Street's top-line expectations.

Probably not hurting that performance: In last Friday's Mad Money broadcast, Jim Cramer jumped on ON as well, recommending the stock as one of his "Tech Spec" picks of the week. He said that ON is doing good job eliminating debt and bolstering its balance sheet and suggested that the company represented a better chip-sector play than its peer Sigma Designs(SIGM Quote).

ON shares were trading midday Monday at $5.89, up 28 cents, or 5%, on volume of nearly 8 million shares. Activity in ON stock has been brisk of late. Average daily volume is 10.3 million shares.