With Several Possible Catalysts, Atmel Corp. Providing Good Entry Point

Analysts at American Technology Research this morning had a good note on Atmel Corp. (ATML), believing that the stock presents an opportune entry point at current levels. The firm initiated a "buy" rating on the company with a $7.50 target. The analysts cited Atmel shares that are trading below a fair value for its core microcontroller business, due in large part to a recent power struggle/proxy fight in the executive ranks, lingering stock option issues and the company's failure to file financials for the past four reported quarters. The firm says each of these issues presents a potential catalyst for shares when resolved.

The upgrade comes at an appropriate time as shareholders recently voted in favor of its current directors and rejected a proposal from co-founder and former chief executive officer George Perlegos to replace board members with his own selected nominees. Atmel is also soon expected to complete its investigation into options practices and file outstanding quarterly reports by the NASDAQ's deadline of June 8 which could boost shares.

Just this time last year, RDG Capital was making a bid for the company that valued Atmel at $5.50 a share, or $2.7 billion total. With some of the overhang on Atmel that has kept the price depressed removed, such a future bid would likely have to be higher and would present another upside catalyst.

ATML 1-yr chart: