My Top Semiconductor Stock (And 12 Others to Sell)

Today was a tough day on Wall Street, as earnings season jitters got the best of some investors. The Dow finished down nearly 200 points, or 1%, and the tech-heavy NASDAQ fell over 1.6%. Apple (AAPL), Google (GOOG) and Microsoft (MSFT) all fell today. The biggest loser by far was Nokia Corp. (NOK), which plunged 12% after disappointing on Q2 earnings.

But while the closing bell has already rung, we’re starting to see some fascinating after hours activity. One of my favorite semiconductor stocks just reported earnings, and judging from the initial reaction, it did quite well. Let’s take a look:

Skyworks Solutions Inc. (SWKS) reported robust sales and earnings growth for the fiscal second quarter. For starters, second-quarter revenue surged 58% year-on-year to $762 million. This surpassed analysts’ estimates of $751.83 million in revenue. Over the same period, adjusted operating income skyrocketed 99% to $258.9 million, or $1.15 per share. Not only did this beat analysts’ estimates of $1.13 EPS, it topped the company’s own guidance of $1.12 EPS.

And there’s plenty more excitement ahead for Skyworks. For the third quarter, management is looking for Skyworks to bring in $800 million in revenue. This is above the Street top-line forecast of $781.81 million. In the meantime, Skyworks’ board of directors has declared a cash dividend of $0.13 per share. Shareholders of record on May 14 will receive the dividend on June 4. At current prices, Skyworks has a modest 0.5% annual dividend yield. While the dividend may not be enough to write home about, Skyworks’ sales and earnings momentum certainly are. For this reason, SWKS is an A-rated Strong Buy in Portfolio Grader.

A Dozen Chipmakers to Sell

However, that’s not to say that all chipmakers are doing as well as Skyworks. As we saw today, things have gotten more volatile in the tech sector, and many semiconductor companies have been knocked down a peg or two. Here are 12 "dime a dozen" semiconductor stocks that you should consider selling immediately:

Symbol Company Name Quantitative Grade Fundamental Grade Total Grade
AMD Advanced Micro Devices, Inc. F D F
ATML Atmel Corporation D C D
CREE Cree, Inc. F D D
MCHP Microchip Technology Incorporated D C D
MRVL Marvell Technology Group Ltd. D C D
MXIM Maxim Integrated Products, Inc. D C D
POWI Power Integrations, Inc. F C D
SLAB Silicon Laboratories Inc. D C D
SMTC Semtech Corporation D C D
TER Teradyne, Inc. D D D
VECO Veeco Instruments Inc. F C F
XLNX Xilinx, Inc. D C D


Louis Navellier

Louis Navellier

P.S. I will be speaking at the JW Marriott Atlanta in Atlanta, Georgia, on Tuesday, May 5. This seminar starts at 7 P.M. and you may attend at no cost, but please call 800-454-1395 to register. I will review where investors can achieve the highest yields in both bonds and stocks, as well my current market outlook, favorite stock picks and have an extensive question-and-answer session.

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