In my book, one of the best penny stock investments can make
right now is a swing trade in small cap tech stock
). Shares of this penny stock are hovering around $1.35, and it's
an investment well worth your money -- if your trading strategy
favors active investing and a little more risk in your stocks.
I'm not typically a big proponent of penny stocks, since many of
these companies are too small to offer the elite fundamentals I
look for -- either they don't have analyst coverage to prompt an
earnings or sales surprise, or they just don't have a large enough
operation for growth to mean anything. But TSEM counters both of
those complaints. Tower Semiconductor has coverage on Wall Street,
and by more than one analyst. Also the company enjoys a
market cap belied by its $1.30 share price - almost $270 million as
of this writing.
As for performance, TSEM shares are up about 40% this year
compared to a small slide in the broader market since January 1.
That shows you the power of this stock.
Tower Semiconductor is located in Israel, and operates two
fabrication facilities there, as well as one fabrication facility
in the United States and manufacturing partnerships in China. It is
a real global player in the tech sector. Tower along with its
wholly owned subsidiary Jazz Semiconductor are seeing brisk growth
as consumer spending improves around the global and the demand for
communications equipments and electronics -- as well as the
semiconductors that make them tick -- is growing rapidly. This is
hot tech investment opportunities
, of which TSEM is just one.
That growth is proceeding much faster than Wall Street
anticipated After posting losses in recent quarterly reports, Tower
surprised analysts with a huge profit in its recent earnings report
- blowing away forecasts by over +360%. Its EPS of 14 cents
trounced the consensus target of just 3 cents. What's more, the
report was a significant improvement over the previous quarter and
a sign that Tower is on the right track.
When Q2 earnings roll out, I expect a similar showing. The
earnings target is around 16 cents. What's more, last year's Q2
numbers showed a significant loss - so even if TSEM hits the mark
it will be showing evidence of a strong turnaround trend.
All this presents a great buying opportunity. I have just
completed my weekly fundamental analysis and TSEM is one of my top
penny stocks to buy now
. That said, you should keep in mind Tower's big gains year-to-date
and try to buy in on a dip and understand that shares could hit a
ceiling soon. I recommend buying in on a day like today, when
shares are down about 2% -- though always trade during market
hours, and use a limit order to make sure you don't overpay. And
use a stop loss to protect yourself if you don't have the stomach
for a wild ride, since this stock can be quite volatile.
Finally, don't get greedy -- shares of TSEM were in the $1.80
range as recently as March, so if the stock bounces back you could
make a quick 40% on a swing trade. If TSEM tallies gains like that,
hanging on and hoping for a doubler could cause more harm than
As of this writing,
did not own shares of TSEM in either personal or client