Author Archives: Scalper1

Tech Investors: 6 Highly Rated Chip Stocks Approach Buy Zones

With the market in a confirmed uptrend, it’s time to scan for stocks to potentially add to your portfolio. Let’s take a look at six highly rated chip stocks that are nearing buy points: Broadcom ( AVGO ), Macom Technology ( MTSI ), Maxlinear ( MXL ), Cirrus Logic ( CRUS ), Microsemi ( MSCC ) and Nvidia ( NVDA ). Two Form Double-Bottom Bases Broadcom earns a near-best IBD Composite Rating of 98 out of 99 and is due to report quarterly results after the close today. Analysts expect earnings to increase 10% and revenue to rise 6%. Broadcom has formed a double-bottom base within a larger consolidation pattern. Shares edged a few cents above the 138.79 buy point in intraday trade on Thursday, but they reversed lower with a 0.9% drop. Broadcom is 10% below its high reached last June. Macom Technology is also working on a double-bottom base, which has a 41.42 buy point. After retaking its 50-day line a few sessions ago, it’s now just 2% below the buy zone. Shares rallied 1.7% Thursday. Macom has a Composite Rating of 98 as well. The rating is based on fundamental and technical factors, including earnings and sales growth, profit margins, return on equity and relative share-price performance. Working On Right Side Of Pattern Maxlinear has a highest-possible 99 Composite Rating. It’s trading about 5% below a cup-base buy point of 17.85, but it slipped 1.7% Thursday. The stock was able to find support at its 200-day line as it formed the base. Apple ( AAPL ) chip supplier Cirrus Logic is trading 6% below a buy point from a nine-month-long consolidation pattern. Shares reversed lower Thursday in light volume, falling 1.7%. Cirrus has a 95 Composite Rating, as does Microsemi. Microsemi is trading 9% below a 39.66 buy point. It was able to retake its 200-day line last week in above-average volume. And Nvidia, a Tesla ( TSLA ) partner, is trading 4% below a buy point at 34.04. The stock gapped up to retake its 50-day line last month on the back of a strong quarterly report. Nvidia has a 99 Composite Rating.

Ciena Sinks On Q1 Sales Miss, Dragging Fiber Optics Stocks Down

Fiber optic network and switch designer Ciena ( CIEN ) issued fiscal Q1 earnings early Thursday that beat Wall Street consensus, but its sales missed lowered estimates, as did its sales outlook, and shares plunged to a 15-month low. “Macro strikes again,” Nomura analyst Jeffrey Kvaal said in a research note after the earnings release, citing “recent volatility in the macro environment,” notably weak spending in European, Middle Eastern and African markets. Ciena stock was down 19%, below 17, in early afternoon trading in the stock market today . Shares are more than 35% off a two-year high of 26.50 touched last July. Ciena designs ethernet transport/switching systems used in network infrastructure by telecom and cable service providers. Infinera ( INFN ), Finisar ( FNSR ) and sector giant Cisco Systems ( CSCO ) work in similar or related spaces. Ciena dragged its entire IBD Telecom-Fiber Optics industry group down 4% by early afternoon, with Infinera down 8%. Finisar stock was down 1% and Cisco down a fraction Thursday afternoon. In December, Ciena had guided to revenue of $555 million to $590 million for its fiscal first quarter ended Jan. 31. It didn’t give EPS guidance. At the time, analysts had modeled EPS ex items of 28 cents on revenue of $638 million, but analysts polled by Thomson Reuters subsequently lowered their estimates to 14 cents and $576.3 million. So while Ciena beat on EPS, reporting 18 cents ex items, it beat only the scaled-back expectations, while Q1 revenue of $573.1 million missed even Wall Street’s revised estimate. Analysts expect the current Q2 ending in April to produce 31 cents per share ex items on revenue of $643.4 million, but Ciena forecast $630 million at the midpoint of its guidance range. Ciena guided Q2 gross margins to the mid-40s percentile, with analyst consensus at 44.9%, while operating expenditures of about $225 million “implies (an) operating margin of about 9.3% vs. consensus of 10.3%,” said Nomura’s Kvaal. “Despite some recent volatility in the broader macroeconomic environment, the demand drivers for our business remain firmly in place, and we are well positioned to translate our market leadership into continued growth and profitability this fiscal year,” Ciena CEO Gary Smith said in the earnings release.

Yahoo Prepping To Auction Off Its Core Internet Business: Report

Yahoo ( YHOO ) is about to hold a traditional auction for its core Internet search business and has begun sending nondisclosure agreements to prospective bidders, according to a media report. Rather than talking with buyers individually, “Yahoo is holding a traditional auction for the sale with formal bids,” according to an item carried by CTFN late Wednesday. Yahoo CEO Marissa Mayer is under intensified pressure from major investor Starboard Value, which has urged the exit of Mayer and some directors, as well as the spinoff of Yahoo’s core search business. Yahoo directors are close to offering at least two board seats to the activist hedge fund in order to avert a proxy fight, according to a report on Friday in the New York Post. Analysts say Yahoo is poised to lose more ad dollars to Facebook ( FB ), Alphabet ( GOOGL )-owned Google and high-profile startups such as Snapchat and Pinterest. On Monday, Yahoo said that it may have to write down the goodwill value of Tumblr , more than two years after the Web pioneer spent $1.1 billion to buy the microblogging site. Bloomberg reported last week that Yahoo was preparing to meet with potential suitors. Among the companies rumored to be interested in Yahoo are Comcast ( CMCSA ), Verizon Communications ( VZ ),  AT&T ( T ) and Time ( TIME ). Rumors re-emerged this week that e-commerce giant Alibaba Group ( BABA ) might buy back a valuable stake that Yahoo now holds in the Chinese company. Yahoo’s Asian assets — comprised of its Alibaba holdings and a 35.5% stake in Yahoo Japan — represent the vast majority of Yahoo’s $3.8 billion market value. Yahoo owns a 15% stake in Alibaba, or about 384 million shares. But some observers say such a transaction is unlikely because of high tax implications for Alibaba. On Monday, Alibaba senior executives Jack Ma and Joe Tsai said they will spend a combined $500 million to buy company stock. It will be part of a $4 billion stock-buyback plan that Alibaba announced in August. Alibaba’s recent financial moves have some investors wondering if the Chinese conglomerate is ready to make a play for Yahoo , according to a report in Variety. Yahoo stock was down 0.5% in midday trading in the stock market today , near 32.75. Yahoo stock had risen in 11 of the previous 12 trading days, gaining 25% since early February, amid the buyout expectations. But shares still are down 25% over the past 12 months.