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

TQNT broke from a bullish 'V' formation before succumbing to profit-taking


TriQuint Semiconductor (TQNT) — 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, 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). 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.

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