The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
) -- Goldman Sachs published a report entitled "Americas: Technology: Semiconductors," on January 2. The report isn't publicly available, but we will summarize its main points. In it, James Covello, James Schneider, Mark Delaney and Gabriela Borges suggest that the semiconductor sector is expected to perform better than the semi production equipment sector.
Semiconductor shipments are currently below trend and fundamentals are likely to improve in the second quarter of 2012. Orders for semi production equipment, on the other hand, are likely to decline by mid-2012. In this article, we will focus on Goldman Sachs' favorite stocks in this industry.
engages in the design, engineering, manufacture and sales of microelectronic products. It has been given a buy rating by Goldman Sachs, which believes that Aeroflex is the most likely stock in its coverage universe that will be acquired in 2012. The company's ability to do a tax-free spin off of its Test and Microelectronic segments will be a positive catalyst for the company in 2012. Growth in 4G LTE is also expected.
Shares of Aeroflex closed Friday at $13.49 and are expected to go north of $14.
had $19 million invested in ARX at the end of September.
is a semiconductor company that designs, manufactures and markets programmable logic devices and other products. Goldman Sachs has given it a buy rating and expects Altera to revert to its previous shipping trends in 2012. With its increased exposure to wireless spending, continued share gains and its exposure to OEM customers, Altera is expected to outperform in 2012.
Shares of the company closed Friday at $40.35 and are expected to reach a price target of $44. This price target is based on 17x the normalized earnings per share estimates of $2.60. Billionaire
' Renaissance Technologies had $170 million invested in Altera at the end of the third quarter.
(NXPI - Get Report)
provides mixed signal solutions and semiconductor components. It has been given a buy rating by Goldman Sachs, which believes that NXP Semiconductors is best positioned to realize earnings leverage from the bottom of the cycle. With higher utilization, higher sales volume and a shift away from standard to high margin segments, the company is expected to perform better in 2012.
Shares of NXP closed Friday at $20.56, above its price target of $19. This price target is based on 9x the normalized earnings per share estimate of $2.10.
Eminence Capital initiated a brand new position in NXPI during the third quarter.