Profit-Taking Offers Ideal Entry Point in This Low-Priced Semi Stock

by Sam Collins | September 24, 2013 1:31 am

TriQuint Semiconductor (TQNT[1]) — This mid-cap company is a worldwide developer and supplier of high-performance gallium arsenide microwave monolithic integrated circuits for wireless operations.

On Aug. 13[2], with the stock at $ 7.75, I said, “Annual gross margins are expected to grow by 32% in 2013 and 36% in 2014, according to S&P. Earnings per share are projected to be $0.06 in 2013 and $0.55 in 2014. S&P’s 12-month target is $10.”

Analysts say that 4G connections are expected to explode to 1 billion in 2017, which will benefit the company. On Sept. 16, it announced that its TriConnect 5 GHz WLAN front-end modules and premium LTE/Wi-Fi coexistence filters are being used by Broadcom (BRCM[3]). This could cause significant gains in revenue, which is already expected to increase 9% this year.

Technically, TQNT’s initial breakout in late April was a picture-perfect break from a double-top, followed in May by a golden cross, a very bullish signal. Following a channel down consolidation from mid-May to mid-June, the stock jumped on a breakaway gap to over $8.

On Monday, TQNT broke from a bullish “V” formation to a new high at $8.49, only to become the victim of profit-taking, closing down $0.02 for the day at $8.12. I view this as a good opportunity to buy this major supplier to the growing 4G market and the developing 5G market for mobile devices and Wi-Fi.

09 24 13 tqnt 300x195 Profit Taking Offers Ideal Entry Point in This Low Priced Semi Stock
Click to Enlarge

chart key 300x84 Profit Taking Offers Ideal Entry Point in This Low Priced Semi Stock[4]

Endnotes:
  1. TQNT: http://studio-5.financialcontent.com/investplace/quote?Symbol=TQNT
  2. On Aug. 13: http://investorplace.com/2013/08/trade-of-the-day-triquent-semiconductor-tqnt/
  3. BRCM: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRCM
  4. [Image]: http://investorplace.com/wp-content/uploads/2013/05/chart-key.gif

Source URL: http://investorplace.com/2013/09/trade-of-the-day-triquint-semiconductor-tqnt-2/
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