Microsemi Winning Market Share in Notebook Chips (MSCC)

Wedbush Morgan analysts Craig Berger and James Schneider upgraded Microsemi Corporation (MSCC) to a 'buy' in recent note to clients. The analysts noted 'near-term momentum and favorable momentum' and set a price target of $36 (currently trading at $30). Key points from Berger and Schneider:

* Channel checks indicate that Microsemi is winning some market share in notebook CCFL inverter chips.
* Healthy semiconductor demand and tight industry supply increase likelihood of successful chip price hikes this fall, contributing to higher margins.
* Phase III consolidation, APT acquisition, analog outsourcing, and some chip price increases should drive higher margins off of a much larger revenue base, a positive.
* Our concerns regarding excess medical device inventory are easing following strong shipments from key customers.
* Upgrading shares from HOLD to BUY as recent pullback presents a buying opportunity; raising target price from $30 to $36.

MSCC 1-yr chart: