"We have increased conviction that our investment thesis of accelerating top-line expansion coupled with ongoing cost rationalization will drive meaningful leverage to the bottom line,” he writes in a research note.
With a healthy backlog and long lead times, visibility is a key comparative differentiator and the primary catalyst for making Microsemi our favorite analog stock.
Aberle says the company exited its fiscal third quarter ended June “with considerable momentum,” and asserts that results should “surprise to the upside.” But he also notes that he is not making a one quarter call, and the upgrade “is an extension of our bullish inflection four months ago by which we pointed to bookings acceleration and long lead times as a catalyst for financial upside.”
Microsemi Thursday is up $1.10 at $25.55.
MSCC 1-yr chart: