RBC turns bullish on Nvidia/Broadcom/Micron/TI/Altera


In a bullish call on chip stocks, RBC's Doug Freedman has upgraded Nvidia (NVDA +2.9%), Broadcom (BRCM +1.8%), Micron (MU +3.3%), Texas Instruments (TXN +1.3%), and Altera (ALTR +1.8%) to Outperform.

Freedman sees the industry's free cash flow profile improving as it transitions "into a more mature era," and companies embrace more "shareholder-friendly capital-allocation strategies."

Nvidia, TI, and Altera have already announced major cash-return efforts in recent years. TI has promised to return all of its FCF to shareholders, save for funds needed to pay down debt.

Micron (just digested Elpida) and Broadcom have been more cautious, though the latter did hike its dividend in January.

Freedman downgraded Micron on Jan. 3, when shares were at $21.66. He was bullish during the company's big 2012/2013 rally.

Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG

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Comments (1)
  • Retired Securities Attorney
    , contributor
    Comments (4063) | Send Message
     
    See. Even analysts can sometimes see the error of their ways. :-)
    19 May 2014, 11:01 AM Reply Like
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