Digital semiconductors encompass an expansive and diverse group of technology companies, and offer special challenges to even the most astute analysts and investors. Next Inning Technology Research Editor Paul McWilliams whose Next Inning model portfolio has returned nearly 300% since inception helps his readers cut through the mountain of data and misinformation generated by the technology press and analysts, and provides direct analysis of which stocks should be watched the most carefully for maximum profit generation.
In Next Inning's latest State of Tech report, McWilliams provides extensive analysis of nine semiconductor companies specializing in NAND Flash and DRAM memory, touch screen control, microprocessors, and programmable logic, part of a universe of about 65 total companies in which he provides quarterly in-depth analysis. McWilliams alerts readers to industry and technology trends that even the most well known of market watchers either overlook or do not fully understand.
Most Wall Street observers currently are highly enamored with Atmel based on the strength of its touch screen technology, but McWilliams warns readers those pundits are ignoring mid- and long-term competitive threats to Atmel, and haven't crunched the numbers closely enough to understand how dependent Atmel is on that singular revenue stream. While the current management team did a great job beginning about five years ago in rebuilding the company, "somewhere along the way they took a wrong turn, and don't realize they are now speeding down the wrong road."
Although Atmel has the potential to grow its touch screen business by about 20% this year, that growth rate is a trickle compared to last year, and longer-term trends are not favorable, McWilliams says. Atmel's touch screen technology position will be under increasing attack from direct competitors, competitive technology, and integration into processor-based System on a Chip (SoC) designs. Next Inning free trial subscribers will have immediate access to this report, which includes McWilliams' comments on where he believes the stock his headed next.
McWilliams has long made the observation that memory manufacturers are part of highly commoditized technology sector where long-term strategic investing is rarely, if ever, a good idea. Being able to play against the tide, selling when most observers are accumulating, and buying when many believe business models are hopelessly damaged. This is particularly true for Micron whose revenues and earnings are so unpredictable the company itself tends to shy away from specific guidance and asks analysts and investors to "roll their own" numbers.
"While I see no responsible way to forecast earnings for a semiconductor memory company, short-term swing trades of Micron can be quite profitable," McWilliams said. He has stepped his readers through a series swing trades regarding Micron in the past. His latest report, available free to trial subscribers, includes a set up for a new potential swing trade in Micron.
SanDisk is unique in that it is the only pure-play NAND Flash memory manufacturer. And while NAND Flash holds some of the same characteristics as others memory types, which can make long-term valuation modeling virtually impossible, McWilliams sees technology and demand trends currently favoring NAND Flash and SanDisk. Not only does NAND Flash have a "viable runway" to grow as it increasingly replaces hard disk drives (HDDs) with growth largely only constrained by capacity, its traditional markets are also poised for significant growth, McWilliams observes. McWilliams' new report includes a new price target for SanDisk that may represent significant upside for investors.