Seeking Alpha

Goldman turns cautious on chip stocks, downgrades INVN/NXPI/MXIM

  • Following a strong 2014 rally fueled by healthy industry growth and hopes for more consolidation, Goldman has lowered its rating for the semi industry to Cautious from Neutral.
  • The firm thinks industry shipment growth will slow down, and sees risk to Q4 estimates. InvenSense (NYSE:INVN) has been cut to Neutral, NXP (NASDAQ:NXPI) to Sell, and Maxim (NASDAQ:MXIM) to Buy from Conviction Buy.
  • Benchmark aired cautious remarks about the sector last month, noting supply chain inventories have been rising and Taiwanese electronics growth (seen as a proxy for chip demand) has been slowing down.
  • Regarding InvenSense, analyst Mark Delaney notes shares have hit Goldman's $25 target and have soundly outperformed the S&P 500 since being added to Goldman's Americas Buy list near the end of 2011. He adds a key near-term catalyst (share gains at Apple) has played out.
  • INVN -2.4%. NXPI -3.3%.
  • Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
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Comments (4)
  • Esekla
    , contributor
    Comments (3740) | Send Message
     
    I've been saying for a while now that the Apple design win for InvenSense, while not officially announced, is already priced in. In the meantime, other near term risk factors have developed, as documented by my articles.
    18 Aug 2014, 09:39 AM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1246) | Send Message
     
    Played out? If you read seeking alpha's discussions on INVN you will notice half people do not even believe there were any share gains in apple yet.
    18 Aug 2014, 12:39 PM Reply Like
  • Esekla
    , contributor
    Comments (3740) | Send Message
     
    Yeah, well INVN doesn't pay a dividend. You're guaranteed that half the money going into and out of stocks like these at any given point is a losing bet. Read my Momentum Mechanism article if you want just a glimpse at why retail investors reading the news and message boards are unlikely to be the winning dollars.

     

    If you want to focus on INVN in particular then discuss the evidence presented in my articles, rather than an arbitrary set of opinions, whether they be from sell-side analysts or random posters here.
    18 Aug 2014, 12:58 PM Reply Like
  • 27975573
    , contributor
    Comments (307) | Send Message
     
    Esekla & Philip.....

     

    You both have valid points, but INVN trades in an open marketplace
    and I have witnessed the "Appletonians" drive market prices way
    past there relative value before.
    I expect the latest Apple roll-outs and accompanying hype to do it again;thus I believe that INVN has more room to run. I am currently trying tofigure how and where toput my stop order.
    Long INVN......for now.
    19 Aug 2014, 07:49 PM Reply Like
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