Northland's Tom Sepenzis is reiterating an Outperform and $20 PT on InvenSense (INVN +11.8%), while predicting wearable computing growth, rising Samsung penetration, CES and Mobile World Congress news flow, and the growing inclusion of optical image stabilization (OIS) within smartphones will act as 2014 catalysts.
Like Piper's Gus Richard, Sepenzis highlights InvenSense's strong gyroscope design win activity at Samsung (a 30%+ customer). He also observes wearable devices such as smartwatches and heads-up displays often incorporate multiple MEMS motion sensors, and considers InvenSense to be "in the best position" to secure these design wins.
InvenSense has already obtained design wins for Samsung's Galaxy Gear smartwatch and the first version of Google Glass. But compared with high-volume smartphones and tablets, unit shipments for both products have been limited thus far. Glass' commercial launch is expected in early 2014.
Short-covering is probably contributing to today's big gains. 35% of the float was shorted as of Dec. 13.