3 Smaller, Large-Cap Chip Stocks Expected To Move Higher
Tech, Artificial Intelligence
Seeking Alpha Analyst Since 2020
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CEO Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
Summary
- ON Semiconductor (ON), Qorvo (QRVO), and Teradyne (TER).
- Market caps < $25 billion; score very well on FA and TA.
- 3 semiconductor companies, smaller large-cap, received bullish signals & high probabilities of success.
In the investment world the definition of a large-cap stock is any company that has a market cap over $10 billion. That leaves a lot of room between $10 billion and the $1 trillion market cap we now have for a few stocks. Combing Tickeron’s list of A.I. Trend Predictions from January 14, I couldn’t help but notice three semiconductor companies with smaller, but still large-cap, stocks that received bullish signals with high probabilities of success.
All three stocks get a “strong buy” rating from Tickeron’s scorecard and the signals all had confidence levels of 88%-89%. The three companies are ON Semiconductor (ON), Qorvo (QRVO), and Teradyne (TER). All three have market caps below $25 billion and they score very well on the fundamental and technical screener.
All three stocks get one negative score on their fundamental analysis, but it’s a different indicator in each case. Teradyne gets four positive readings from the fundamentals, Qorvo gets three positives, and ON Semiconductor gets two positive readings. The only area where all three score really well is in the Profit vs. Risk ratings. Teradyne and Qorvo both get great marks in the Price Growth Ratings.
The companies do even better on the technical analysis screener. All three stocks get four bullish signals. Teradyne doesn’t get any bearish signals while Qorvo and ON Semiconductor each get one bearish signal.
One of the more interesting observations was that the four bullish signals were the same for all three stocks. The signals came from the Aroon Indicator, the MACD indicators, the Momentum indicators, and the Moving Average indicators. The bearish signals for Qorvo and ON Semiconductor were both from the Bollinger Bands.
All three of these stocks have rallied tremendously since their March lows. ON Semiconductor is up nearly 350%, Teradyne is up over 200%, and Qorvo is up over 150%. The rallies have put all three stocks in overbought territory based on their 10-week RSIs and their weekly stochastic indicators. But as the saying goes, “overbought can always become more overbought.”
Looking at the sentiment indicators for the three stocks, something else caught my attention. The short interest ratios for both ON Semiconductor and for Teradyne are extremely high. Teradyne’s is 7.41 and ON’s is 8.04. The average short interest ratio is around 3.0. What the high short interest ratios suggest is that there is considerable bearish sentiment building toward the stocks.
From a contrarian perspective, a high short interest ratio is a good sign because it means, if the stock continues to rally, the short sellers can add buying pressure if they have to cover.
The complete comparison of the three stocks from Tickeron appears below. It shows how the stocks compare to one another and how they stack up against other stocks.
THE FOLLOWING PART OF THE ARTICLE IS UPDATED ON JANUARY 18, 2021
ON vs QRVO vs TER: Comparison
Stock price -- TER: $137.30, QRVO: $177.29, ON: $36.71
Brand notoriety: TER and ON are notable and QRVO is not notable
ON and QRVO are part of the Semiconductors industry, while TER is in the Electronic Production Equipment
Current volume relative to the 65-day Moving Average: TER: 124%, ON: 116%, QRVO: 129%
Market capitalization -- TER: $22.8B, ON: $15.1B, QRVO: $20.2B
ON [@Semiconductors] is valued at $15.1B. QRVO’s [@Semiconductors] market capitalization is $20.2B. TER [@Electronic Production Equipment] has a market capitalization of $22.8B. The market cap for tickers in the [@Semiconductors] industry ranges from $3.7M to $649.5B.The market cap for tickers in the [@Electronic Production Equipment] industry ranges from $25.1M to $78.8B. The average market capitalization across the [@Semiconductors] industry is $30.5B. The average market capitalization across the [@Semiconductors] industry is $30.5B.
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is undervalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
TER’s FA Score shows that 4 FA rating(S) are green while ON’s FA Score has 2 green FA rating(S), and ’s FA Score reflects 2 green FA rating(S).
- TER’s FA Score: 4 green, 1 red.
- ON’s FA Score: 2 green, 3 red.
- QRVO’s FA Score: 2 green, 3 red.
According to our system of comparison, TER is a better buy in the long-term than ON, which in turn is a better option than QRVO.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
ON’s TA Score shows that 6 TA indicator(S) are bullish while QRVO’s TA Score has 6 bullish TA indicator(S), and TER’s TA Score reflects 6 bullish TA indicator(S).
- ON’s TA Score: 6 bullish, 4 bearish.
- QRVO’s TA Score: 6 bullish, 4 bearish.
- TER’s TA Score: 6 bullish, 4 bearish.
According to our system of comparison, TER is a better buy in the short-term than QRVO, which in turn is a better option than ON.
Price Growth
TER (@Electronic Production Equipment) experienced а +3.90% price change this week, while ON (@Semiconductors) price change was +3.35%, and QRVO (@Semiconductors) price fluctuated --1.18% for the same time period.
The average weekly price growth across all stocks in the @Electronic Production Equipment industry was +5.03%. For the same industry, the average monthly price growth was +15.78%, and the average quarterly price growth was +51.90%.
The average weekly price growth across all stocks in the @Semiconductors industry was +1.85%. For the same industry, the average monthly price growth was +17.21%, and the average quarterly price growth was +85.10%.
Reported Earning Dates
QRVO is expected to report earnings on Jul 13, 2021.
ON is expected to report earnings on Jul 13, 2021.
TER is expected to report earnings on Jul 13, 2021.
Industries' Descriptions
@Electronic Production Equipment (+5.0% weekly)
The electronic production equipment industry makes equipment used to produce semiconductors. Such equipment includes wafer fabrication, plasma etching and photo-resist processing equipment. The industry also makes chemical vapor deposition processing systems and photomasks, which are high-purity quartz plates that contain patterns to define integrated circuits layouts. Applied Materials, Inc., Lam Research Corporation, and KLA-Tencor Corporation are examples of electronic production equipment manufacturing companies.
@Semiconductors (+1.8% weekly)
The semiconductor industry manufacturers all chip-related products, including research and development. These chips are used in innumerable electronic devices, including computers, cell phones, smartphones, and GPSs. Intel Corporation, NVIDIA Corp., and Broadcomm are some of the prominent players in this industry. Semiconductor companies usually tend to do well during periods of healthy economic growth, thereby inducing further research and development in the industry – which in turn augurs well for productivity and growth in the economy. In the near future, demand for semiconductor products (and possibly innovation within the segment) should only expand further, with the proliferation of 5G, autonomous vehicles, IoT, and various AI-driven electronics set to herald a new, advanced chapter in the technology-driven world as we know it. With burgeoning prospects comes great competition. In 2015, SIA estimated that U.S. semiconductor industry ranks as the second most competitive U.S. industry out of 2882 U.S. industries designated manufacturers by the U.S. Census Bureau.
ON vs QRVO vs TER: Fundamental Ratings
ON |
TER |
QRVO |
|
|---|---|---|---|
|
OUTLOOK RATING 1..100 |
34 | 31 | 34 |
|
VALUATION overvalued / fair valued / undervalued 1..100 |
59 Fair valued |
27 Undervalued |
62 Fair valued |
|
PROFIT vs RISK RATING 1..100 |
24 | 5 | 9 |
|
SMR RATING 1..100 |
76 | 17 | 54 |
|
PRICE GROWTH RATING 1..100 |
41 | 2 | 9 |
|
P/E GROWTH RATING 1..100 |
13 | 37 | 76 |
|
SEASONALITY SCORE 1..100 |
n/a | n/a | 50 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
TER's Valuation (27) in the Electronic Production Equipment industry is in the same range as ON (59) in the Semiconductors industry, and is somewhat better than the same rating for QRVO (62) in the Semiconductors industry. This means that TER's stock grew similarly to ON’s and somewhat faster than QRVO’s over the last 12 months.
TER's Profit vs Risk Rating (5) in the Electronic Production Equipment industry is in the same range as QRVO (9) in the Semiconductors industry, and is in the same range as ON (24) in the Semiconductors industry. This means that TER's stock grew similarly to QRVO’s and similarly to ON’s over the last 12 months.
TER's SMR Rating (17) in the Electronic Production Equipment industry is somewhat better than the same rating for QRVO (54) in the Semiconductors industry, and is somewhat better than the same rating for ON (76) in the Semiconductors industry. This means that TER's stock grew somewhat faster than QRVO’s and somewhat faster than ON’s over the last 12 months.
TER's Price Growth Rating (2) in the Electronic Production Equipment industry is in the same range as QRVO (9) in the Semiconductors industry, and is somewhat better than the same rating for ON (41) in the Semiconductors industry. This means that TER's stock grew similarly to QRVO’s and somewhat faster than ON’s over the last 12 months.
ON's P/E Growth Rating (13) in the Semiconductors industry is in the same range as TER (37) in the Electronic Production Equipment industry, and is somewhat better than the same rating for QRVO (76) in the Semiconductors industry. This means that ON's stock grew similarly to TER’s and somewhat faster than QRVO’s over the last 12 months.
ON in upward trend: 10-day moving average broke above 50-day moving average on October 05, 2020
The 10-day Moving Average for ON crossed bullishly above the 50-day moving average on October 05, 2020. This indicates that the trend has shifted higher and could be considered a buy signal. In 16 of 19 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 84%.
Current price $36.71 is above $26.80 the highest resistance line found by A.I. Throughout the month of 12/13/20 - 01/14/21, the price experienced a +19% Uptrend. During the week of 01/07/21 - 01/14/21, the stock enjoyed a +3% Uptrend growth.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on November 04, 2020. You may want to consider a long position or call options on ON as a result. In 69 of 89 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 78%.
The Moving Average Convergence Divergence (MACD) for ON just turned positive on January 05, 2021. Looking at past instances where ON's MACD turned positive, the stock continued to rise in 36 of 44 cases over the following month. The odds of a continued upward trend are 82%.
ON moved above its 50-day Moving Average on September 28, 2020 date and that indicates a change from a downward trend to an upward trend.
Following a +4.09% 3-day Advance, the price is estimated to grow further. Considering data from situations where ON advanced for three days, in 269 of 357 cases, the price rose further within the following month. The odds of a continued upward trend are 75%.
The Aroon Indicator entered an Uptrend today. In 223 of 340 cases where ON Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 66%.
Bearish Trend Analysis
The RSI Indicator demonstrates that the ticker has stayed in the overbought zone for 11 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The Stochastic Indicator demonstrated that the ticker has stayed in the overbought zone for 11 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ON declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 66%.
ON broke above its upper Bollinger Band on January 05, 2021. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 55%. During the last month, the daily ratio of advancing to declining volumes was 2.41 to 1.
The Tickeron PE Growth Rating for this company is 13 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 24 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 48, placing this stock better than average.
The Tickeron Price Growth Rating for this company is 41 (best 1 - 100 worst), indicating fairly steady price growth. ON’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 59 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (4.41) is normal, around the industry mean (6.05). P/E Ratio (76.24) is within average values for comparable stocks, (970.44). Projected Growth (PEG Ratio) (0.00) is also within normal values, averaging (7.80). Dividend Yield (0.00) settles around the average of (0.63) among similar stocks. P/S Ratio (1.80) is also within normal values, averaging (5.83).
The Tickeron SMR rating for this company is 76 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
Momentum Indicator for QRVO turns positive, indicating new upward trend
QRVO saw its Momentum Indicator move above the 0 level on December 23, 2020. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 90 similar instances where the indicator turned positive. In 72 of the 90 cases, the stock moved higher in the following days. The odds of a move higher are at 80%.
Current price $177.29 is above $161.11 the highest support line found by A.I. Throughout the month of 12/13/20 - 01/14/21, the price experienced a +15% Uptrend, while the week of 01/07/21 - 01/14/21 shows a -1% Downtrend.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Moving Average Convergence Divergence (MACD) for QRVO just turned positive on January 06, 2021. Looking at past instances where QRVO's MACD turned positive, the stock continued to rise in 34 of 53 cases over the following month. The odds of a continued upward trend are 64%.
QRVO moved above its 50-day Moving Average on November 04, 2020 date and that indicates a change from a downward trend to an upward trend.
The 10-day Moving Average for QRVO crossed bullishly above the 50-day moving average on September 22, 2020. This indicates that the trend has shifted higher and could be considered a buy signal. In 10 of 17 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 59%.
Following a +2.35% 3-day Advance, the price is estimated to grow further. Considering data from situations where QRVO advanced for three days, in 244 of 312 cases, the price rose further within the following month. The odds of a continued upward trend are 78%.
The Aroon Indicator entered an Uptrend today. In 170 of 250 cases where QRVO Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 68%.
Bearish Trend Analysis
The 10-day RSI Indicator for QRVO moved out of overbought territory on January 15, 2021. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 36 similar instances where the indicator moved out of overbought territory. In 24 of the 36 cases, the stock moved lower in the following days. This puts the odds of a move lower at 67%.
The Stochastic Indicator demonstrated that the ticker has stayed in the overbought zone for 8 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where QRVO declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 61%.
QRVO broke above its upper Bollinger Band on January 06, 2021. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 74%. During the last month, the daily ratio of advancing to declining volumes was 1.8 to 1.
The Tickeron Price Growth Rating for this company is 9 (best 1 - 100 worst), indicating outstanding price growth. QRVO’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 9 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 48, placing this stock better than average.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron SMR rating for this company is 54 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of 62 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (4.59) is normal, around the industry mean (6.05). P/E Ratio (46.44) is within average values for comparable stocks, (970.44). Projected Growth (PEG Ratio) (0.41) is also within normal values, averaging (7.80). Dividend Yield (0.00) settles around the average of (0.63) among similar stocks. P/S Ratio (4.33) is also within normal values, averaging (5.83).
The Tickeron PE Growth Rating for this company is 76 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
Momentum Indicator for TER turns positive, indicating new upward trend
TER saw its Momentum Indicator move above the 0 level on January 05, 2021. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 72 similar instances where the indicator turned positive. In 57 of the 72 cases, the stock moved higher in the following days. The odds of a move higher are at 79%.
Current price $137.30 is above $117.20 the highest resistance line found by A.I. Throughout the month of 12/13/20 - 01/14/21, the price experienced a +17% Uptrend. During the week of 01/07/21 - 01/14/21, the stock enjoyed a +4% Uptrend growth.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Moving Average Convergence Divergence (MACD) for TER just turned positive on January 07, 2021. Looking at past instances where TER's MACD turned positive, the stock continued to rise in 30 of 39 cases over the following month. The odds of a continued upward trend are 77%.
TER moved above its 50-day Moving Average on October 09, 2020 date and that indicates a change from a downward trend to an upward trend.
The 10-day Moving Average for TER crossed bullishly above the 50-day moving average on October 14, 2020. This indicates that the trend has shifted higher and could be considered a buy signal. In 9 of 15 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 60%.
Following a +3.74% 3-day Advance, the price is estimated to grow further. Considering data from situations where TER advanced for three days, in 276 of 389 cases, the price rose further within the following month. The odds of a continued upward trend are 71%.
The Aroon Indicator entered an Uptrend today. In 284 of 398 cases where TER Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 71%.
Bearish Trend Analysis
The RSI Indicator demonstrates that the ticker has stayed in the overbought zone for 6 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The Stochastic Indicator demonstrated that the ticker has stayed in the overbought zone for 6 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where TER declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 60%.
TER broke above its upper Bollinger Band on January 06, 2021. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 79%. During the last month, the daily ratio of advancing to declining volumes was 1.23 to 1.
The Tickeron Price Growth Rating for this company is 2 (best 1 - 100 worst), indicating outstanding price growth. TER’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 5 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 69, placing this stock better than average.
The Tickeron SMR rating for this company is 17 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of 27 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (11.44) is normal, around the industry mean (895.42). P/E Ratio (34.47) is within average values for comparable stocks, (134.50). Projected Growth (PEG Ratio) (0.35) is also within normal values, averaging (1.03). Dividend Yield (0.53) settles around the average of (0.51) among similar stocks. P/S Ratio (4.75) is also within normal values, averaging (15.87).
The Tickeron PE Growth Rating for this company is 37 (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
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