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7 Penny Stock Semiconductor Plays to Buy Now

By: Louis Navellier
Posted: 9/13/2010 4:39:00 PM

Semiconductor stocks ran into some trouble last week, as a number of chipmakers set new 52-week lows. National Semiconductor (NYSE: NSM ), ON Semiconductor Corp. (NASDAQ: ONNN ) and Silicon Laboratories, Inc. (NASDAQ: SLAB ) all set new 52-week lows recently.

However, don't count out the entire sector because of a few bad apples. The bottom line is that a few small up-and-coming semiconductor stocks are seeing big buying pressure right now and could be great investments in the tech sector even now thanks to the strength of their fundamentals.

Here are 7 small-cap semiconductor stocks trading for under $2 that you should consider picking up at bargain prices.

Tower Semiconductor ( TSEM )

Tower Semiconductor (NASDAQ: TSEM ) is an independent foundry that manufactures semiconductors.  Based in Israel, Tower has had great returns in 2010, and is up +36.1% year-to-date, compared to the broader markets which remain close to even.  This quarter, analysts are projecting earnings of 16 cents per share, up from an actual EPS of 15 cents last quarter.  Shareholders are also pleased by the +108% quarterly revenue growth year-over-year.  Over the past 12 months, TSEM's stock is up +33.3%.

Axcelis Technologies ( ACLS )

Headquartered in Massachusetts, Axcelis Technologies (NASDAQ: ACLS ) designs manufactures and services processing equipment used in semiconductor chips.  Axcelis has had a tremendous run over the past 12 months.  Year-to-date, the semiconductor stock is up +4.3%, and has gained +91% since last September.  Axcelis has outperformed earnings estimates for two consecutive quarters, and boasted a quarterly revenue growth of +73.5% year-over-year in its last quarterly statement.

LTX-Credence Corp. (LTXC)

LTX-Credence Corp. (NASDAQ: LTXC ) is known for its automated test equipment solutions for semiconductor products.  The California-based company has remained even in 2010, but has seen its stock climb +23.6% since last September.  An impressive +19.3% net profit margin also has company officials excited.  Additionally, LTXC has outperformed earnings estimates for four consecutive quarters, causing experts to up their earnings estimates to 10 cents per share, after an actual EPS of 5 cents per share last quarter.

FSI International Inc. ( FSII )

Semiconductor stock FSI International Inc. (NASDAQ: FSII ) has slipped -4.8% in 2010.  However, the stock is still riding high after a gain of +133.3% over the past 12 months.  FSI International designs manufactures and markets equipment used in the production of advanced semiconductor products.  FSII has outperformed earnings estimates three out of the last four quarters and analysts have projected EPS of 15 cents for this quarter.  Shareholders have also been hanging their hat on an impressive +20.5% net profit margin last quarter along with quarterly revenue growth of +85.8% year-over-year.

Microtune Inc. ( TUNE )

Based in Texas, Microtune Inc. (NASDAQ: TUNE ) designs and markets receiver solutions for digital television markets and automotive entertainment equipment.  Year-to-date, Microtune's stock has jumped +29.2% compared to the broader markets, which have remained even.  Impressively, TUNE stock has gained +46% over the past 12 months as well.  Microtune has outperformed earnings estimates for four consecutive quarters, causing analysts to raise their estimates for this quarter by a cent. A quarterly revenue growth of +38.5% year-over-year adds to this semiconductor stock's impressive resume.

Camtek Ltd. ( CAMT )

Camtek Ltd. (NASDAQ: CAMT ) is involved in the design, development, manufacture and marketing of automated optical inspection products.  Analysts have raised CAMT stock's earnings estimate by a cent as the stock has either met or outperformed earnings estimates two of the last three quarters.  Over the past 12 months, Camtek's stock has gained +155.7% and boasts a current stock price of $2.25.  With a market cap of $65.8 million, Camtek is a valuable small-cap semiconductor stock to buy.

inTest Corp. ( INTT )

inTest Corp. (NASDAQ: INTT ) is a designer, manufacturer and marketer of mechanical, thermal and electrical products that are used in the production of semiconductors.  inTest has been one of the strongest stocks on this list with year-to-date returns of +48.6% and an enormous gain of +747% since last September.  INTT reported a net profit margin of +20.8% in its last income statement, and had a quarterly revenue growth of +227% year-over-year.  At $2.57 per share, INTT is one of the strongest buying opportunities on this list.

As of this writing, Louis Navellier did not own a position in any of the stocks named here.

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