While there are still some obstacles to overcome, I'm encouraged by the fact that Atmel's latest maXTouch solutions have picked up new design wins and continues to gain momentum in "non-traditional" touch devices/products such as automotive applications.

As much as I like Atmel's future prospects, I don't believe that the stock is cheap when compared to Qualcomm or Broadcom ( BRCM). However, when matched up with Texas Instruments, which trades at almost 17-times fiscal 2014 estimates, Atmel's forward P/E of 13 seems more attractive, given their respective business transitions.

I don't want to make this sound as if I'm beating up on Texas Instruments, though. I believe the company is heading in the right direction and I have complete faith in management's ability to execute the transition towards Embedded Processing.

However, I just don't believe the company's current situation deserves the premiums the stock commands, not when gross margins are also on the decline. Accordingly, I would still be a seller here at $35 per share and above, and I would look to a better rebound potential in a company like Atmel, which is showing more promise.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Richard Saintvilus is a private investor with an information technology and engineering background and the founder and producer of the investor Web site Saint's Sense. He has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.

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