Do you like the growth prospects of tech stocks such as semiconductors? For a closer look at the industry, we ran a screen you might find interesting.
We began by screening the semiconductor industry for stocks that appear undervalued relative to earnings growth, with PEG below 1. We then screened these names for those with the optimism of smart money investors, with significant net institutional purchases over the last quarter representing at least 5% of share float.
Interactive Chart: Press Play to compare changes in market cap over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
Do you think these names will outperform like hedge fund managers expect? Use this list as a starting point for your own analysis.
List sorted by net institutional buying as a percent of share float.
1. Spreadtrum Communications Inc. (SPRD): Operates as a fabless semiconductor company that designs, develops, and markets baseband processor and RF transceiver solutions for wireless communications and mobile television markets. Market cap at $778.46M. Price at $14.85. PEG at 0.39. Net institutional purchases in the current quarter at 9.5M shares, which represents about 33.26% of the company's float of 28.56M shares.
2. SanDisk Corp. (SNDK): Designs, develops, manufactures, and markets NAND-based flash data storage card products that are used in various consumer electronics products. Market cap at $9.97B. Price at $41.27. PEG at 0.64. Net institutional purchases in the current quarter at 17.9M shares, which represents about 7.51% of the company's float of 238.50M shares.
3. Cirrus Logic Inc. (CRUS): Develops high-precision analog and mixed-signal integrated circuits. Market cap at $1.50B. Price at $23.30. PEG at 0.5. Net institutional purchases in the current quarter at 3.6M shares, which represents about 6.69% of the company's float of 53.82M shares.
4. CEVA Inc. (CEVA): And its subsidiaries engage in designing and licensing silicon intellectual property for the handsets, portable multimedia, and consumer electronics markets. Market cap at $520.12M. Price at $22.21. PEG at 1. Net institutional purchases in the current quarter at 1.4M shares, which represents about 6.09% of the company's float of 22.98M shares.
5. Alpha & Omega Semiconductor, Ltd. (AOSL): Engages in the design, development, and supply of a range of power semiconductors worldwide. Market cap at $218.96M. Price at $8.77. PEG at 0.48. Net institutional purchases in the current quarter at 982.0K shares, which represents about 5.73% of the company's float of 17.13M shares.
6. NVE Corp. (NVEC): Engages in the development and sale of devices that use spintronics, a nanotechnology that relies on electron spin to acquire, store, and transmit information. Market cap at $238.64M. Price at $49.06. PEG at 0.81. Net institutional purchases in the current quarter at 220.8K shares, which represents about 5.05% of the company's float of 4.37M shares.
*Institutional data sourced from Fidelity, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.