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If you consider yourself a value investor, you may be interested in this list.

Value investors look for stocks that they believe are trading at significant discounts to their fair value, with the assumption that they’ll soon rise to their fair value generating a profit for those keen enough to find them. One proxy for fair value is analyst target price.

We ran a screen on the semiconductor industry of the tech sector for stocks trading at the largest discounts to their analyst target prices.

But because target prices are notoriously inflated, we only used the most pessimistic (the lowest) target prices, and for stocks with sufficient analyst coverage we only screened for stocks with 5 or more analyst ratings.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.


(Click to enlarge)

Do you think these stocks are trading below their fair values? Use this list as a starting point for your own analysis.

List sorted by potential upside implied by target price.

1. Microsemi Corp. (NASDAQ:MSCC): Engages in the design, manufacture, and marketing of analog and mixed-signal integrated circuits (IC) and semiconductors primarily in the United States, as well as in Europe and Asia. Market cap of $1.35B. Of the 9 analysts that have set a target price on the stock, the lowest price target stands at $22.00. This implies a current upside of 32.93% from current levels around $16.55. It's been a rough couple of days for the stock, losing 12.12% over the last week.

2. Skyworks Solutions Inc. (NASDAQ:SWKS): Offers analog and mixed signal semiconductors worldwide. Market cap of $2.63B. Of the 16 analysts that have set a target price on the stock, the lowest price target stands at $21.00. This implies a current upside of 32.08% from current levels around $15.90. The stock is currently stuck in a downtrend, trading 26.08% below its SMA20, 29.2% below its SMA50, and 43.42% below its SMA200. It's been a rough couple of days for the stock, losing 18.79% over the last week.

3. LTX-Credence Corporation (LTXC): Engages in the design, manufacture, marketing, and servicing of automated test equipment solutions for the wireless, computing, automotive, and digital consumer markets. Market cap of $240.64M. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $7.00. This implies a current upside of 30.35% from current levels around $5.37. This is a risky stock that is significantly more volatile than the overall market (beta = 2.57). It's been a rough couple of days for the stock, losing 18.57% over the last week.

4. Lattice Semiconductor Corporation (NASDAQ:LSCC): Designs, develops, manufactures, and markets programmable logic products and related software. Market cap of $725.41M. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $8.00. This implies a current upside of 24.61% from current levels around $6.42. The stock has gained 34.64% over the last year.

5. Photronics Inc. (NASDAQ:PLAB): Engages in the manufacture and sale of photomasks primarily in the United States, Europe, and Asia. Market cap of $296.16M. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $6.50. This implies a current upside of 24.05% from current levels around $5.24. This is a risky stock that is significantly more volatile than the overall market (beta = 3.17). The stock is a short squeeze candidate, with a short float at 12.24% (equivalent to 8.84 days of average volume). It's been a rough couple of days for the stock, losing 11.92% over the last week.

6. IPG Photonics Corporation (NASDAQ:IPGP): Manufactures fiber lasers and amplifiers for use in a range of markets, such as materials processing, advanced technologies, telecommunications, and medical applications. Market cap of $1.85B. Of the 9 analysts that have set a target price on the stock, the lowest price target stands at $50.00. This implies a current upside of 22.22% from current levels around $40.91. The stock is currently stuck in a downtrend, trading 18.37% below its SMA20, 23.05% below its SMA50, and 33.76% below its SMA200. It's been a rough couple of days for the stock, losing 10.68% over the last week.

7. MEMC Electronic Materials Inc. (WFR): Engages in the development, manufacture, and sale of silicon wafers for the semiconductor industry worldwide. Market cap of $903.44M. Of the 20 analysts that have set a target price on the stock, the lowest price target stands at $5.00. This implies a current upside of 21.36% from current levels around $4.12. The stock is currently stuck in a downtrend, trading 21.68% below its SMA20, 29.33% below its SMA50, and 55.48% below its SMA200. It's been a rough couple of days for the stock, losing 10.71% over the last week.

8. PMC-Sierra Inc. (NASDAQ:PMCS): Engages in the design, development, marketing, and support of semiconductor solutions for the enterprise infrastructure and communications infrastructure markets. Market cap of $1.25B. Of the 11 analysts that have set a target price on the stock, the lowest price target stands at $6.50. This implies a current upside of 15.45% from current levels around $5.63. The stock is currently stuck in a downtrend, trading 11.41% below its SMA20, 13.38% below its SMA50, and 22.04% below its SMA200. It's been a rough couple of days for the stock, losing 8.26% over the last week.

*Target price data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 8 Semiconductor Stocks Deeply Undervalued By Target Price