![]() Notwithstanding, a sure sign of management confidence – or hubris – is KLA's use of cash, the largest expenditure of which were for the company's stock buybacks and payments of dividends to shareholders, at 78% of free cash flow. So, when one or all of these customers face troubles, it can spell trouble for KLA too. Semiconductor supply companies face a big concentration as there are a limited number of customers big enough to service the foundries and related companies. This is not an entirely logical constellation, however. Shares are up 46% in the past 12 months (more if you include the 1.1% dividend), versus the iShares Semiconductor ETF ( SOXX), which is up 39%. These solid fundamentals have helped KLAC shares outperform their fellow semiconductor stocks in recent months. KLA's free cash flow (cash from operations less capital expenditures) arrived at $815.7 million on a quarterly basis. The company sports a decent balance sheet with good liquidity, and operating cash flow exceeded $3.54 billion on a 12-month basis in its fiscal first quarter. Revenue of $2.4 billion and GAAP earnings of $5.41 per share came in at the upper end of KLA's guidance range. And it's one that remains intact following the company's fiscal first-quarter earnings report. ![]() The investment thesis for KLA ( KLA, $544.54) which offers semiconductor manufacturing solutions, is simple: fundamentals and industry outlook. Clearly, MRVL is looking to the future, though what the future looks like, beyond continued, if albeit lumpy expansion, remains difficult to discern. A look at Marvell's statement of cash flows shows that stock-based compensation, depreciation and amortization of intangible assets totaled $500 million for the most recently reported quarter, a figure which dwarfs a reported net loss of $207 million.Īlso notable also is the company's commitment to research and development, spending nearly $475 million in the last quarter. When looking at Marvell, or for that matter, most tech stocks, the earnings per share is not always the best measurement for success. This was particularly true in automotive/industrial, where the revenue rose 32% year-over-year. MRVL is not impervious to the headwinds facing the semi industry such as weakening demand in the consumer sector, but it was able to maintain growth in other end markets. For the six months ended July 29, MRVL reported revenue of $2.66 billion. The company had revenue of $1.34 billion, down 12% year-over-year but above the $1.32 billion reported in its fiscal first quarter. Marvell reported better-than-expected results in the second quarter of fiscal 2024. ![]() Off the price charts, the company – which makes semiconductors for data storage, communications and consumer markets – is holding its own too. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.Įverything seems to still be moving in the right direction at Marvell Technology ( MRVL, $55.58), including the share price which is up about 50% in the past 10 months or so. ![]() With that in mind, here are five of the best semiconductor stocks to buy now.ĭata is as of November 17. I also included chipmakers that offer some grist for stock pickers who like to look below the surface for opportunities. I used my decades of experience in quantitative analysis to identify the best stocks to buy among semiconductors, seeking companies that are simply fundamentally superior, with leadership positions in growing end markets. But for intrepid investors, it also created one of the greatest buying opportunities ever, particularly as many stocks have rebounded sharply in recent months. How we chose the best semiconductor stocksĢ022 was certainly one of the most difficult years for semiconductor stocks in recent memory. According to one estimate from the I nternational Data Corporation (IDC), the AI market is projected to surge from $118 billion in 2022 to $300 billion by 2026. Growth in AI is expected to continue too. Add to that artificial intelligence (AI), which has been a major positive catalyst for a number of stocks this year.
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