Integrated Device Technology Inc (NASDAQ:IDTI) — This information technology company manufactures a broad line of low-power, high-performance semiconductors intended for advanced communications. The products are used for development in areas such as fourth-generation (4G) infrastructure, network communications, cloud datacenters and power management for computing and mobile devices.
Standard & Poor’s forecasts that sales will increase 5.3% in fiscal year 2018 (March) following a 4.4% rise in FY 2017 and a 22% increase in FY 2016. Industrial and automotive demand is pushing growth, along with significant increases in mobile sensing technology. Management has spent several years reorganizing in order to bring new products to market quickly.
Thus, according to S&P, which rates the stock a “five-star buy,” the company is now able to target faster-growing markets. Their 12-month price target is $30, based upon a price-to-earnings ratio of about 19.7X FY 2018 operating EPS estimate.
Following a low at $16.22 on Feb. 11, 2016, IDTI began a series of rallies, supported by high volume. The stock broke through its 200-day moving average in May and with the lows in June and August and highs in June and November established an impressive bull channel.
A Golden Cross (50-day crosses through 200-day moving average) is a long-term bull signal that occurs in many bullish charts; it was triggered in October. A recent “V” formation completes the picture, indicating that the stock should break through its 50-day moving average on the path to a new high.
Thus buy IDTI at $25 with a trading target of $30. Investors may buy this mid-cap IT stock for greater returns over a longer period.
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