Intersil Corp (NASDAQ:ISIL) — Shares of ISIL stock rose 1.3% last week following the semiconductor company’s quarterly earnings announcement. Intersil reported a profit of 17 cents per share, beating analysts’ estimates by a penny. Sales of $134 million were up 1.2% year over year and also beat expectations of $133.4 million.
Following the report, S&P Capital IQ Equity Research reiterated its “Buy” rating on ISIL stock and increased its price target by $1 to $17. Its analysts noted the company has been placing less emphasis on products for PC sales and more on diversification, including mobile and cloud-based computing.
Intersil has also successfully reduced product costs, which has increased gross margins. Management’s ability to stabilize its product portfolio and revenues have resulted in increases in the top and bottom lines. For the full year, Capital IQ is projecting a 4.5% increase in sales and 68 cents in operating earnings per share (EPS).
Turning to the chart, we see that ISIL stock is in a bull market following the break in May from a right triangle consolidation pattern. The breakout was supported by high volume and several buy signals from my proprietary internal indicator, the Collins-Bollinger Reversal (CBR).
Following the breakout, a profit-taking reversal took shares down to just below their 50-day and 200-day moving averages around $13. The reversal was also supported by high volume and resulted in a run to $15.50.
I’m hopeful that profit-taking will give traders another chance to buy ISIL stock at about $14 with a trading target of $18. If successful, this trade would result in a return of almost 29%. Long-term investors should consider buying shares at the market price for even higher capital gains and above-average income. Intersil pays an annual dividend of 48 cents per share for a forward yield of 3.2%.
