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8 Semiconductor Stocks Powering Down

These stocks are getting hit particularly hard on worries over slowing demand and inventory oversupply

By Anthony Mirhaydari, InvestorPlace Market Strategist

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U.S. equities have rebounded higher on Tuesday, trying to recover from five straight losses amid ongoing pressure from trade war fears.

The latest is that China has asked the World Trade Organization to get involved with its spat with the United States, looking for sanctions on $8.4 billion worth of exports. This is the latest strategy out of Beijing, which has recently included efforts to lobby Wall Street executives to push back against President Trump’s trade agenda.

Also lingering in the minds of traders is Friday’s super-strong jobs report featuring a surprise increase in wage inflation. This is raising expectations of a more aggressive pace of Federal Reserve rate hikes through the end of this year and into 2019. And of course, the situation in many emerging market currencies looks tenuous.

So, while the Dow Jones Industrial Average is doing its best to retake the 26,000 level, which it has been struggling to get back above over the last three weeks, any rebound is likely to be short-lived here. A number of sectors are leading the way down with semiconductors in particular getting hit on worries over slowing demand and inventory oversupply.

Here are eight semiconductor stocks getting hammered:

Semiconductor Stocks to Sell: Skyworks (SWKS)

Semiconductor Stocks to Sell: Skyworks (SWKS)

Shares of Skyworks (NASDAQ:SWKS), a supplier of components to mobile devices such as tablets and wearables, are collapsing below their late April lows to mark a decline of roughly 26% from the high set in March. The technical picture is ugly, with the March high marking the third attempt to push above the $115 level (with prior attempts in late 2017 and the middle of 2015). Today’s decline also violates the 200-week moving average which hasn’t been crossed since way back in 2013.

SWKS will next report results on Oct. 18, after the bell. Analysts are looking for earnings of $1.78 on earnings of $1 billion. When the company last reported on July 19, earnings of $1.64-per-share beat estimates by 4 cents on a 0.7% decline in revenues.

Semiconductor Stocks to Sell: On Semiconductor (ON)

Semiconductor Stocks to Sell: On Semiconductor (ON)

On Semiconductor (NASDAQ:ON) shares are extending their downtrend this week, falling further below their 200-day moving average, marking a near-30% decline from their March high. ON was recently handed a downgrade from Morgan Stanley analysts, who issued a sell rating, further encouraging the first major selloff in the company since early 2016.

The company will next report results on Oct. 29, before the bell. Analysts are looking for earnings of 50-cents-per-share on revenues of $1.51 billion. When the company last reported on July 29, earnings of 46-cents-per-share beat estimates by a penny on an 8.8% rise in revenues.

Semiconductor Stocks to Sell: STMicroelectronics (STM)

Semiconductor Stocks to Sell: STMicroelectronics (STM)

STMicroelectronics (NYSE:STM) shares are falling to new lows, returning to levels last seen in late 2017 and marking a decline of more than 30% from the highs seen in June. The company, based in Switzerland, is a maker of semiconductor components from audio amplifiers to stepper motor drivers.

The company will next report results on Oct. 24, before the bell. Analysts are looking for earnings of 37-cents-per-share on revenues of $2.5 billion. When the company last reported on July 25, earnings of 29-cents-per-share beat estimates by a penny on an 18% rise in revenues. Management highlighted persisting trade tariff concerns and production inefficiencies that have weighed on profitability.

Semiconductor Stocks to Sell: Cypress Semiconductor (CY)

Semiconductor Stocks to Sell: Cypress Semiconductor (CY)

Cypress Semiconductor (NASDAQ:CY) shares are falling further below their 200-day moving average, mimicking falls in May and July, after double-topping near the $18.50 level. This is a level of resistance that goes all the way to 2011. The company is in the midst of a strategic shift that has encouraged a lot of positive analyst commentary (with Craig Hallum raising their price target in July, citing strong auto demand). But worries over the health of the auto sector has since weighed on prices.

The company will next report results on Oct. 25, after the close. Analysts are looking for earnings of 32-cents-per-share on revenues of $669.6 million. When the company last reported on July 26, earnings of 32-cents-per-share beat estimates by 4 cents on a 5.1% rise in revenues.

Semiconductor Stocks to Sell: Intel (INTC)

Semiconductor Stocks to Sell: Intel (INTC)

One of the better known companies among semiconductor stocks, Intel (NASDAQ:INTC) is also experiencing some difficulty. INTC shares are breaking down to fresh lows, falling further away from their 200-day moving average with a break of critical support near $46. This marks a 19%+ decline from its early June high. Shares have been embattled by everything from management turnover (caught in a #metoo scandal) to data security bugs and lingering questions about its product roadmap. Oh, and Apple is ditching the company’s chips for its Mac computers starting in 2020.

The company will next report results on Oct. 25, after the close. Analysts are looking for earnings of $1.15-per-share on revenues of $18.1 billion. When the company last reported on July 26, earnings of $1.04 beat estimates by 7 cents on a 14.9% rise in revenues.

Semiconductor Stocks to Sell: Texas Instruments (TXN)

Semiconductor Stocks to Sell: Texas Instruments (TXN)

Texas Instruments (NASDAQ:TXN) shares are breaking down below their 200-day moving average for the first time since early 2016, ending a rise that saw shares more than double and ending a year-long sideways crawl with a downside move. The next stop for support would be around $96, which is worth around a 10% drop from current levels. Recent strength has come from averages such as industrial and automotive, both of which are areas that are vulnerable to a worsening of the trade situation.

The company will next report results on Oct. 23, after the close. Analysts are looking for earnings of $1.53-per-share on revenues of $4.3 billion. When the company last reported on July 24, earnings of $1.37-per-share beat estimates by 2 cents on an 8.8% rise in revenues.

Semiconductor Stocks to Sell: Micron Technology (MU)

Semiconductor Stocks to Sell: Micron Technology (MU)

Micron Technology (NASDAQ:MU) shares are breaking down below a seven-month consolidation range after being turned away from double-top resistance near $64. Extending down and away from its 200-day moving average, watch for a test of critical resistance near $40. The semiconductor stock was recently hit with a price target downgrade from analysts at RBC Capital Markets, as well.

The company will next report results on Sept. 20, after the close. Analysts are looking for earnings of $3.3-per-share on revenues of $8.22 billion. When the company last reported on June 20, earnings of $3.15 beat estimates by 2 cents on a 40.1% rise in revenues.

Semiconductor Stocks to Sell: Marvell Technology Group (MRVL)

Semiconductor Stocks to Sell: Marvell Technology Group (MRVL)

Marvell Technology Group (NASDAQ:MRVL) shares are falling down out of a trading range that has been in place since last November, extending below its 200-day moving average for the first time since the summer of 2015. Support isn’t likely until around $15.50, which would be worth a fall of around 16% from here. Investors are walking away on worries over the integration of its recent acquisition of Cavium, which closed in June.

The company will next report results on Dec. 6, after the close. Analysts are looking for earnings of 32-cents-per-share on revenues of $845.4 million. When the company last reported on Sept. 6, earnings of 35-cents-per-share matched estimates on a 10.1% rise in revenues.

Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.


Article printed from InvestorPlace Media, https://investorplace.com/2018/09/8-semiconductor-stocks-powering-down/.

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