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The Zacks Analyst Blog Highlights: Intel, NVIDIA, Greatbatch, M/A-Com Technology Solutions Holdings and MaxLinear


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For Immediate Release

Chicago, IL - January 20, 2016 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Intel Corporation ( INTC ), NVIDIA Corporation ( NVDA ), Greatbatch, Inc. ( GB ), M/A-Com Technology Solutions Holdings, Inc. ( MTSI ) and MaxLinear, Inc. ( MXL ).

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Here are highlights from Tuesday's Analyst Blog:

Forget Intel: Buy These Semiconductor Stocks Instead

On Thursday, semiconductor giant Intel Corporation ( INTC ) posted strong fourth-quarter and full-year results after the market close. Surprisingly, however, shares dropped 9% the following day (Read: Intel Q4 Earnings: Another Beat on Good Execution ).

What was the reason for such a sharp drop in response to a report that actually exceeded Wall Street's expectations?

Investors reacted adversely to the fiscal first-quarter 2016 guidance. Intel expects to generate revenues of $14.0 billion due to the uncertain macroeconomic environment, predominantly in China (FXI).

Making things worse, Intel stated that gross margins - one of its closely watched parameters - would fall to its lowest in years.

Intel expects GAAP gross margins to plunge to 58%, +/- a couple of points, down 6.3 percentage points. It expects non-GAAP margins to be 62%, +/- a couple of points.

Why the Weak Outlook?

Intel blamed the continued slump in demand for personal computers for the weak first-quarter sales estimates.

The company took into account the revenues from the purchase of technology company Altera, as well as a somewhat weak performance by its chip business for server computers.

While Intel still derives the bulk (59%) of its revenue from the computing market, it is making advancements in areas with greater potential. These areas would be data center, IoT and NAND.

Combined segment revenue grew 3.9% sequentially and 6.0% year over year and contributed over 34% of total profit. Not exceptional of course but not too bad either considering the changing mix toward new segments like cloud computing, IoT and NAND and the fact that the numbers aren't perfect because Intel doesn't break out its memory segment yet and instead clubs some expenses with it.

Management said, however, that this group contributed 40% of revenue and 60% of operating profit in 2015, which speaks volumes for the diversification strategy.

Overall computing units are on a decline, consistent with unfavorable macro in Asia and China and PC market concerns, but improving ASPs and mix are positives. Mobility costs will be reduced by $800 million through the year. There is no channel stuffing according to management, which is another positive.

Intel is targeting more devices at various price points which is an offset to margin expansion. As long as this business remains stable (last quarter really wasn't too bad) and the other segments grow, Intel results won't disappoint.

Guidance was okay once you take out the one-time items, so the sell-off seems like an over-reaction.

Capital spending is spiking this year as may be expected because Intel will start production on 10nm, 3D NAND and 3D XPoint.

Other Options

The chip industry, as a whole, bore the brunt for the guidance given by Intel. Competitor Advanced Micro Devices (AMD) plunged nearly 10% following the news.

We, however, have three alternative semiconductor stocks which, unlike Intel, look quite promising right now. This is indicated by rising estimate revisions as well as solid growth stats, which suggest that any of the four stocks discussed below may serve as better alternatives than Intel right now:

NVIDIA Corporation ( NVDA )

NVIDIA Corporation designs, develops and markets a complete family of award-winning 3D graphics processors, graphics processing units and related software that set the standard for performance, quality and features for every type of desktop personal computer user, from professional workstations to low-cost computers.

The company has an Expected EPS growth rate of 8.90%.

The Zacks Rank #1 (Strong Buy) stock received 1 positive estimate revision over the last 7 days, for fiscal 2017. The company has received no negative estimate revision over the last 60 days.

Greatbatch, Inc. ( GB )

Greatbatch is a leading developer and manufacturer of critical components used in implantable medical devices and other technically demanding applications.

The company has an Expected EPS growth rate of 15.00%.

Greatbatch sports a Zacks Rank #1 (Strong Buy) and received 2 positive estimate revisions for the current year, over the last 30 days. The company received no negative estimate revision in the last two months.

The Zacks Consensus Estimate climbed 14.8% in the last 30 days to its current level of $3.41 a share for the current year.

M/A-Com Technology Solutions Holdings, Inc. ( MTSI )

M/A-COM provides analog semiconductor solutions for wireless and wireline applications across the RF, microwave and millimeterwave spectra.

The company has an Expected EPS growth rate of 21.77%.

M/A-COM is a Zacks Rank #1 stock and, over the past 30 days, has received 2 positive estimate revisions for the current year. The company has received no negative estimate revision in the last two months.

The Zacks Consensus Estimate climbed 8.63% to its current level of $1.51 a share for the current year.

MaxLinear, Inc. ( MXL )

MaxLinear provides radio-frequency analog and mixed signal semiconductor SoC solutions for broadband communication applications offering small silicon die-size, and low power consumption.

The company has an Expected EPS growth rate of 17.50%.

Over the past one month, this Zacks Rank #1 stock received 1 positive estimate revision for the current year. The company has received no negative estimate revisions in the last 60-day period.

The Zacks Consensus Estimate climbed 7.61% to its current level of $1.13 a share for the current year.

Want to find the best stocks for 2016? Find out more information about the market-crushing Zacks Top 10 list here >>>

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INTEL CORP (INTC): Free Stock Analysis Report

NVIDIA CORP (NVDA): Free Stock Analysis Report

GREATBATCH INC (GB): Free Stock Analysis Report

MA-COM TECH SOL (MTSI): Free Stock Analysis Report

MAXLINEAR INC-A (MXL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Stocks
Referenced Symbols: INTC , NVDA , MTSI , MXL



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