Market corrections are depressing events yet they have a silver lining. Sort through the carnage and you just might find a couple of oversold gems worthy of adding to your portfolio.
Take a close look at the stocks that dipped the most in the previous week or so and it will become abundantly clear some semiconductor stocks have been significantly oversold. Even if you have several semiconductors in your portfolio, it is in your interest to consider adding more following the sector’s recent dip.
Without further ado, let’s take a close look at three semiconductor stocks worth serious consideration following the market dip: Texas Instruments (TXN), United Microelectronics (UMC), and Qualcomm (QCOM).
TXN makes mixed-signal, analog, and DSP integrated circuits. DSP is an acronym short for digital signal processing. The company has design and manufacturing facilities throughout the continent and also in Europe and Asia.
TXN has a forward P/E ratio of 25.23, meaning the stock might be slightly overpriced at $191.85 per share. TXN is priced about $5 below its 52-week high of $197.58. The stock’s 52-week low is $125.43. TXN has a beta of 1.03, meaning it is unlikely to make a significant move should the market get rocky.
TXN has a B POWR Ratings grade with an A Quality component grade, a B Sentiment component grade, and Cs in the Growth and Stability components. Click here to find out how TXN fares in the rest of the POWR Ratings components such as Momentum and Value.
Of the 99 publicly traded companies in the Semiconductor & Wireless Chip space, TXN is ranked 32. You can learn more about the stocks in this sector by clicking here.
The analysts insist TXN is underpriced, setting an average price target of $201.19 for the stock. If TXN moves to this price level, it will have increased by nearly 7% in value. The average analyst price target for the stock has shot up an impressive $81.73 in the prior 13 months.
UMC provides foundry services for semiconductor applications. The company’s bread and butter are creating high yield integrated circuit wafers made specifically for each customer. UMC also provides its customers with IP resources, no-cost design libraries, and ongoing support for front-end and backend problem-solving.
UMC has a forward P/E ratio of 16.26. This ratio indicates the stock might be a bit overpriced. UMC is currently trading at $8.94, merely a couple of dollars below its 52-week high of $11.28. UMC’s beta is also 1.03 so it is unlikely to freefall or skyrocket if the market makes a major move.
UMC has an A POWR Rating grade. The stock has an A Sentiment component grade along with Bs in the Momentum, Quality, and Stability components. Click here to learn how UMC fares in the rest of the POWR Ratings components such as Value and Growth. UMC is ranked second of 99 stocks in the Semiconductor & Wireless Chip space. You can learn more about the publicly traded companies in this category by clicking here.
QCOM makes and markets digital wireless telecommunications products/services. Examples of QCOM products include CDMA integrated circuits, wireless voice software, GPS systems, and data communications.
QCOM’s forward P/E ratio of 17.89 is slightly elevated yet understandable considering the stock is currently trading less than $25 away from its 52-week high of $167.94. The stock’s 52-week low is $87.51. If the market goes wild, QCOM will likely prove relatively tame as the stock has a fairly low beta of 1.32.
QCOM is a POWR Ratings beast with an A grade meaning it is a Strong Buy. QCOM has B grades in the Value, Sentiment, Quality, and Growth components of the POWR Ratings. If you would like to know how QCOM fares in the rest of the POWR Ratings components such as Momentum and Stability, you can find out by clicking here.
Of the nearly 100 stocks in the Semiconductor & Wireless Chip space, QCOM is ranked in the top five, slotting in at exactly number five. Click here to find out more about the stocks in this category.
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TXN shares were trading at $183.91 per share on Thursday afternoon, down $10.33 (-5.32%). Year-to-date, TXN has gained 13.35%, versus a 17.25% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...
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