Cypress Semiconductor Corporation (CY): Avoiding This Stock Is In Your Best Interests

Also, a lot would depend on how Samsung’s efforts in the tablet market pan out. Samsung’s tablets have done pretty well for themselves over the past year, with the company’s market share increasing to 15% in the December quarter, double from the year-ago period.

If the company can replicate its success this year as well, then it should be a boost for Cypress Semiconductor Corporation (NASDAQ:CY). However, Samsung would have to ward off the potential challenge of the next version of the iPad mini, which would probably be sporting a retina display. Thus, we need to keep an eye on Cypress’ book-to-bill ratio and check if it holds up well when Apple Inc. (NASDAQ:AAPL)’s much-anticipated tablet hits the market.

The PSD business has declined rapidly over the past few quarters, and I’m not too sure if a turnaround can happen soon. However, Cypress’ Memory Products Division has held steady, and might even get better as the company has completed its acquisition of Ramtron and it’s already accretive to earnings.

However, declining sales of computers are a big threat to this business. In addition, prices of static random access memory (SRAM) have been plunging over the past few years, and the company’s focus on nonvolatile memory could take time to bear fruit as they are expensive.

What next?

Analysts are expecting a decline in revenue and earnings this year, and Cypress Semiconductor Corporation (NASDAQ:CY)’s recently released results haven’t done anything to reverse analyst sentiment. Keeping all these factors in mind, it would be prudent to avoid Cypress for the time being, even though the company pays a dividend yielding 3.9%.

The article Avoiding This Stock Is in Your Best Interests originally appeared on Fool.com and is written by Harsh Chauhan.

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