3 Outperforming Semiconductors Undervalued By EPS Trends

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Includes: AXTI, HIMX, LSI-OLD
by: Kapitall

Do you prefer investing in growth sectors such as tech? For a closer look at the tech sector, we ran a screen.

We began by screening the semiconductor industry for stocks that have been outperforming the market over the last quarter, with over 20% returns.

We then screened these names for those that appear undervalued relative to EPS trends. Based on the assumption that P/E is equal to a constant k, increases in EPS should be matched by increases in price. When they don't match up, a mispricing may have occurred.

We screened for stocks with faster growth in EPS estimates than price over the last month, which may indicate that these names are being undervalued.

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

Do you think these stocks offer both value and growth? Use this list as a starting point for your own analysis.

List sorted by difference between growth in EPS estimates and change in price over the last 30 days.

1. LSI Corporation (LSI-OLD): Designs, develops, and markets storage and networking semiconductors and storage systems worldwide. Market cap at $4.73B. Price at $8.22. Performance over the last quarter at 23.44%. The EPS estimate for the company's current year increased from 0.58 to 0.68 over the last 30 days, an increase of 17.24%. This increase came during a time when the stock price changed by -6.87% (from 8.73 to 8.13 over the last 30 days).

2. Himax Technologies, Inc. (HIMX): Designs, develops, and markets semiconductors for flat panel displays. Market cap at $376.84M. Price at $2.16. Performance over the last quarter at 61.36%. The EPS estimate for the company's current year increased from 0.16 to 0.2 over the last 30 days, an increase of 25%. This increase came during a time when the stock price changed by 10.71% (from 1.96 to 2.17 over the last 30 days).

3. AXT Inc. (AXTI): Designs, develops, manufactures, and distributes compound and single element semiconductor substrates for use in wireless communications, lighting display applications, fiber optic communications, and solar cell. Market cap at $206.52M. Price at $6.30. Performance over the last quarter at 42.00%. The EPS estimate for the company's current year increased from 0.49 to 0.5 over the last 30 days, an increase of 2.04%. This increase came during a time when the stock price changed by -6.69% (from 6.43 to 6 over the last 30 days).

*EPS data sourced from Yahoo! Finance, 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.