Are you interested in the high-growth prospects of the semiconductors industry? For a closer look at some promising semiconductors names, we ran a screen.
We began by screening the semiconductors industry for stocks with current ratios above 3, indicating high liquidity. The current ratio is current assets/current liabilities, so ratios above 3 indicate the company has at least 3 times the liquid assets to cover their short-term liabilities.
We then screened for those with strong profitability compared to industry peers, with higher gross, operating, and pretax margins than their industry averages by at least 5% on each margin. This indicates that these companies are taking a greater percentage of their revenues as profits, and they also have stronger control over their cost structures.
For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.
Tool provided by Kapitall (kapitall.com).
Do you think these stocks are poised to move higher? Use this list as a starting point for your own analysis.
List sorted by difference between pretax margin and industry average.
1. Altera Corp. (ALTR): Designs, manufactures, and markets programmable logic devices (plds); structured application-specific integrated circuit devices; predefined design building blocks or intellectual-property cores; and associated development tools. Market cap at $10.26B. Price at $31.56. Current ratio at 4.07. TTM gross margin at 71.46% vs. industry average at 60.28%. TTM operating margin at 37.57% vs. industry average at 22.31%. TTM pretax margin at 37.73% vs. industry average at 20.53%.
2. CEVA Inc. (CEVA): Engages in designing and licensing silicon intellectual property (SIP) for the handsets, portable multimedia, and consumer electronics markets. Market cap at $359.60M. Price at $15.37. Current ratio at 11.46. TTM gross margin at 95.07% vs. industry average at 60.28%. TTM operating margin at 30.32% vs. industry average at 22.31%. TTM pretax margin at 35.81% vs. industry average at 20.53%.
3. Analog Devices Inc. (ADI): Engages in the design, manufacture, and marketing of analog, mixed-signal, and digital signal processing integrated circuits used in industrial, communication, computer, and consumer applications. Market cap at $10.78B. Price at $36.42. Current ratio at 8.1. TTM gross margin at 69.13% vs. industry average at 60.28%. TTM operating margin at 32.74% vs. industry average at 22.31%. TTM pretax margin at 32.08% vs. industry average at 20.53%.
4. Xilinx Inc. (XLNX): Designs, develops, and markets programmable platforms in North America, the Asia Pacific, Europe, and Japan. Market cap at $8.43B. Price at $31.83. Current ratio at 7.15. TTM gross margin at 67.4% vs. industry average at 60.28%. TTM operating margin at 28.85% vs. industry average at 22.31%. TTM pretax margin at 26.65% vs. industry average at 20.53%.
*Profitability 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.