Top 5 Stock Picks of Gordon Malin’s Mountain Road Advisors

3. NXP Semiconductors N.V. (NASDAQ:NXPI)

Mountain Road Advisors Stake Value: $42,094,000
Percentage of Mountain Road Advisors’ 13F Portfolio: 8.22%
Number of Hedge Fund Holders: 52

NXP Semiconductors N.V. (NASDAQ:NXPI) manufactures high-performance mixed-signal semiconductors in automobiles, mobile payments, and other applications. To allow Electronic Design Automation on the cloud, NXP Semiconductors N.V. has chosen Amazon Web Services (AWS), a subsidiary of Amazon.com, Inc. (NASDAQ:AMZN).

Stacy Rasgon, a Bernstein analyst, downgraded NXP Semiconductors from “Outperform” to “Market Perform” on October 29, with a price target of $230, down from $245. The analyst is becoming increasingly concerned about the stock’s value and the automotive end market.

Mountain Road Advisors started building its position in NXP Semiconductors in the fourth quarter of 2018 and currently holds over 204,618 shares in the company, valued at $42.09 million. The company represents 8.22% of the hedge fund’s 13F portfolio. Out of the hedge funds being tracked by Insider Monkey, Adage Capital Management is a leading shareholder in NXP Semiconductors, with 392,208 shares worth more than $80.69 million.

ClearBridge Investments, in its first-quarter 2021 investor letter, mentioned NXP Semiconductors N.V. (NASDAQ:NXPI). Here is what the fund said:

“Within IT, we have also increased exposure to a cyclical semiconductor industry currently working through a severe supply shortage due to several years of capacity reductions, COVID-19 shutdowns and one-off production delays as well as demand resilience in areas like autos and smartphones. Two recent additions, specialty semiconductor maker NXP Semiconductors and semiconductor capital equipment firm ASML also delivered strong performance in the first quarter. NXP rose as auto production ramped up and electric vehicle sales continued to expand. ASML, which operates in a virtual monopoly for high-end chipmaking equipment, began to exert pricing power as it works through an order backlog that has stretched to over a year. Both are Dutch-based companies and out-of-benchmark names that provide access to different growth profiles than are available in the U.S. The main risk for semiconductors is short-term revenue pressure until capacity catches up with demand, which hurt wireless chipmaker Qualcomm. Looking past current constraints, we expect the industry to see a strong second half and solid growth in 2022.”