10 Most Undervalued Semiconductor Stocks to Buy Now

4. ON Semiconductor Corporation (NASDAQ:ON)

Forward P/E as of March 3: ~18.4x

Number of Hedge Fund Holders: 52

ON Semiconductor Corporation (NASDAQ:ON) offers intelligent sensing and power solutions in the US and internationally. Allegro MicroSystems has been drawing takeover interest from the company, reported Bloomberg. Elsewhere, Mizuho analyst Vijay Rakesh has kept an “Outperform” rating on both Allegro MicroSystems and ON Semiconductor Corporation (NASDAQ:ON). Mizuho expects the potential deal to drive synergies and expand ON Semiconductor Corporation (NASDAQ:ON)’s robust portfolio through the addition of Allegro’s leading magnetic sensor portfolio.

Evercore ISI is also optimistic about the company considering its ongoing turnaround efforts and the potential for a strong revenue generation because of its Treo platform. The firm also expects an improvement in ON Semiconductor Corporation (NASDAQ:ON)’s gross margins, courtesy of a cyclical recovery, together with the reduction in supply chain inventories. Overall, Evercore ISI’s optimism stems from the company’s financial trajectory and strategic initiatives. The company remains focused on maintaining its financial discipline and streamlining its operations. Therefore, the broader growth of the semiconductor market hints at several opportunities for ON Semiconductor Corporation (NASDAQ:ON), mainly in sectors like industrial automation, energy-efficient solutions, 5G infrastructure and consumer electronics.