Though TriQuint’s RF solutions were not featured in the Verizon Communications Inc. (NYSE:VZ) iPhone 4 when it was released about 24 months ago, the company had a piece of the iPhone 4S pie, along with larger peer Skyworks Solutions (NASDAQ:SWKS). More recently, TriQuint has supplied the WCDMA/HSUPA module for the iPhone 5, and investors should expect more Cupertino-related linkage as we approach Apple’s next product cycle.
TriQuint has seen four corporate execs—Directors Roderick Nelson, Scott Gibson, Walden Rhines and David Ho—buy a combined 135,000 shares of common stock since early November. In the time since Mr. Ho began this round of bullish activity, shares of TriQuint have risen 7.7%, supporting those calling for a comeback.
While the company’s stock is down this week on news of revised current-quarter earnings guidance, TriQuint did manage to double up Wall Street’s fourth quarter forecast with a 4-cent adjusted EPS.
On a longer time frame, the sell-side predicts that bottom line growth will average 12%-13% over the next half-decade. At a market price about 12% below its book value per share, TriQuint is obviously cheap, and the average analyst’s price target also sees a double-digit upside from current levels.
MKS Instruments, meanwhile, is the second of Ken Fisher’s “elite” tech duo, and has seen three distinct insider purchases over the past 90 days. In late November of last year, high-level executives Paul Eyerman, Tseng-Chung John Lee and Seth Bagshaw purchased a modest amount of the company’s stock, and shares have risen a whopping 14.9% in the time since.
Much of MKS’s appreciation has occurred since it was upgraded to a “Buy” by BofA-Merrill Lynch on January 8th, citing “high revenue growth leverage early in the cycle as OEM’s (original equipment manufacturers) rebuild inventory to support shipments.” Barclays and Stifel Nicolaus have also issued upgrades in recent months.
Adding to this positive momentum is the company’s recent performance in its fiscal fourth quarter, where it reported last month that it had trounced the Street’s revenue and EPS estimates handily. Top line totals came in 6.8% above consensus, and MKS’s 10-cent EPS was 11 cents higher than expectations. Some of this outperformance is attributable to better-than-expected semiconductor sales, which didn’t fall as far as guidance had predicted. MKS also named “an order from a large Chinese solar customer” and various “cost reduction actions” as factors behind the beat.
Joining Ken Fisher in this stock is a “who’s who” list of hedge fund legends, including Joel Greenblatt, Chuck Royce, Cliff Asness, Jim Simons and Ken Griffin (check out Citadel’s top stock picks here).
In addition to positive sentiment from billionaires, insiders and Wall Street analysts, MKS Instruments also pays a solid dividend yielding 2.3%, and trades at a mere 2.4 times cash and 1.5 times book. Both multiples are below industry averages. It’s easy to see why investors from all corners of the financial world are bullish on this stock, and TriQuint Semiconductor looks attractive as well.
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Disclosure: I hold no positions in any of the stocks mentioned above
