Chris Lau, Kapitall: Semiconductor stocks Micron Technology and NXP Semi continue to be on an upward trajectory.
Micron Technology (MU) and NXP Semiconductor (NXPI) are semiconductor stocks that continue to be on an upward trajectory. Both are at 52-week highs, so neither company would appeal to value investors. Many positive drivers still support a bullish view, namely strong demand and favorable product developments.
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NXP makes digital signal processing products. It reported strong quarterly earnings on February 5. Revenue was $1.293B, gross margin was steady at 45.6%, while operating margins were 15.3% for the quarter. For the year, operating margin was 13.5%. NXP earned $1.36 per share, which gives a P/E of 38. Its price of profitability (or forward P/E) is just 14, which reflects the expectation that the company will grow earnings this year.
NXP’s HPMS (High Performance Mixed Signal) product performed well, and contributed to the 22% year-over-year growth for NXP. The automobile sector grew, and should be expected to be a strong driver for demand. NXP established a sales run-rate of over $1B annually.