2011 was an extremely volatile year for the market.Despite the market ending roughly flat, numerous stocks and sectors were hit extremely hard.I look for a myriad of stocks that performed poorly in 2011 to bounce back strongly in 2012 on any sort of good news as sentiment is terrible on certain sectors (Ex, Solar) and particular equities.
Microsemi Corporation (MSCC):
Microsemi Corporation engages in the design, manufacture, and marketing of analog and mixed-signal integrated circuits (IC) and semiconductors primarily in the United States, Europe, and Asia. Its products include individual components and IC solutions that offer light, sound, and power management for desktop and mobile computing platforms, LCD TVs, and other power control applications.(Business description from Yahoo Finance)
2011 Performance*: -28.44% Current Price: $16.75 Consensus Price Target: $26
*Compared to S&P
Key value observations on MCSS:
- The stock looks like it has successfully bottomed (See Chart).
- The company is showing steady EPS growth.It earned $1.83 per share in FY2011, should make $1.95 in FY2012 and analysts project $2.56 in earnings in FY2013.
- MSCC has a five year projected PEG of under .7.Analysts also expect 20% plus growth in revenues in FY2012 and over 10% in FY2013.
- The stock is selling significantly under analysts’ price targets.The consensus price target on Microsemi is $26, around 60% above current levels.S&P has a “Strong Buy” rating and a $23 price target on MSCC.
Power-One, Inc. designs, manufactures, and markets power conversion and power management solutions for the renewable energy (RE), communications infrastructure, and other technology markets”.(Business description from Yahoo Finance)
2011 Performance*:-61.40% Current Price: $3.91 Consensus Price Target: $6.75
*Compared to S&P
Key value observations on PWER:
- The company has a fortress balance sheet with $1.50 a share in net cash on the books.
- Power-One is one of the cheapest stocks in the market at under 4 times current earnings and a five year projected PEG of .32.
- PWER is selling at the bottom of its five year valuation range based on P/E, P/S, P/B and P/CF.
- The median analysts’ price target on Power One is $6.75, 60% above its current price.Barclays upgraded PWER to “overweight” in November and S&P has a price target on the stock of $5.50.
Disclosure: I am long PWER.