We mentioned Skyworks Solutions (SWKS) had broken out yesterday but its peers were still under resistance levels.  That is no longer an issue as both TriQuint Semiconductor (TQNT) and RF Micro Devices (RFMD) received upgrades today and the computers are rushing in as technical resistance has been blasted through.  This still remains one of my favorite spaces for the move into the smart phone culture, along with a backdoor play on the smart grid.

Unfortunately, the moves have been so dramatic the age old question of chase or not to chase is upon us.  In this market it's not a hard question - you chase everything.

RFMD

  • RF Micro Devices (RFMD) are trading higher this morning after UBS analyst Uche Orji raised his rating on the mobile phone chip maker to Buy from Neutral; he keeps his $5.50 price target.
  • Orji cites three reasons for the more bullish stance:
  • With an improving balance sheet, risk profile has improved.
  • New products for the handset and other markets should drive margins, revenue higher.
  • Current P/E at 10.6x next 12 months looks attractive given 5-year average of about 18x.
  • He writes in a research note that checks from the handset food chain indicate continued strong demand with no signs of inventory build.

  • TriQuint Semiconductor (TQNT) shares are on the rise this morning after Pacific Crest analyst Nathan Johnsen lifted his rating on the chip company’s stock to Outperform from Sector Perform, setting a price target of $7. Yesterday, the stock closed at $5.67.
  • “Recent meetings with TriQuint management have allowed us to more fully appreciate the potential opportunities for TriQuint’s networks business in 2010,” he writes. While the company’s handset business remains a risk given expected pricing pressures, he thinks that the networks segment could be an offset.
  • Johnsen upped his 2010 EPS estimate to 49 cents, from 39 cents; he’s now in line with the Street.
  • The analyst contends that with TriQuint trading at 11.6x his 2010 forecast, the stock is undervalued.

No positions but mulling