This year, investors have had attractive long-term purchasing opportunities on inexpensive semiconductor stocks thanks to the market’s condition. Although chip-makers have had their concerns, the sector is working to clear massive order backlogs and meet demand. Some great semiconductor companies will continue to expand revenues, earnings, and cash flows even if the market is down.
A recent flight – when investors start to move asset allocation away from riskier investments and toward safer ones – contributed to the tech-heavy Nasdaq having dropped more than 24% year to date. Some high-quality semiconductor stocks then became too inexpensive to ignore as a result.
In fact, given single-digit price-to-earnings multiples and dividend yields north of 4%, some semiconductor stocks are positioned to be perfect value bets right now. And now isn’t the wrong time to embrace the “buy the dip” attitude, especially when a stock comes with solid fundamentals; I’ve narrowed it to three.
Let’s have a quick look at three inexpensive semiconductor stocks that analysts strongly support and consider to be wise picks for adding value to our portfolios:
ASE Technology Holding Co Ltd (ASX)
ASE Technology Holding Co. (ASX) is an international semiconductor manufacturing services provider. It develops and provides turnkey solutions in IC (Integrated Circuit) packaging, interconnect material design and manufacture, front-end engineering testing, wafer probing and final testing, and electronic manufacturing. ASX serves a booming semiconductor manufacturing business that barely managed to satisfy consumer demand last year but has a great outlook. ASX was established on April 30th, 2018, in Kaohsiung, Taiwan.
ASX is a company poised for huge growth, and its fundamentals appear to validate that sentiment. Its earnings reports have been mixed, but ASX exceeded both EPS and revenue forecasts most recently. ASX shows promising year-over-year growth: revenue of 177.99% and diluted EPS growth of 52.08%. ASX boasts a dividend yield of 4.41%, with a quarterly payout of 8 cents per share. Over the next five years, Wall Street predicts a solid 34% annualized profits growth rate. The consensus price target for ASX from analysts who provide 12-month estimates is 8.81, with a high of 12.11 and a low of 7.63. The median estimate shows an increase of 29.30% from current pricing, and ASX’s buy rating is well-earned.
Alpha and Omega Semiconductor Ltd (AOSL)
Alpha & Omega Semiconductor Ltd (AOSL) develops, manufactures, and sells power semiconductors. Analog switches, metal-oxide-semiconductor field-effect transistors, insulated-gate bipolar transistors, transient voltage suppressors, and power integrated circuits, to name a few. AOSL has made significant progress in bringing new products to market. So far this year, AOSL has introduced five new sophisticated product improvements. Mike F. Chang, Yueh-Se Ho, Anup Bhalla, and Sik Kwong Lui formed AOSL on September 27th, 2000, and it is based in Sunnyvale, California.
Financially, AOSL’s stock has the impressive distinction of having beaten analysts’ earnings forecasts for the last four consecutive quarters. Most recently, AOSL surpassed EPS estimates by 13.56% and revenue by 4.74%. AOSL also shows healthy year-over-year numbers, all in the green. During the calendar year 2021, AOSL generated $112 million in free cash flow on revenues of $727 million, and its balance sheet became net cash positive. According to experts, earnings and cash flow are expected to set new milestones this year. The consensus price target for AOSL from analysts that provide annual price estimates is 62.00, with a high of 70.00 and a low of 40.00. The forecast indicates an increase of 60.08% over its most recent price, and the consensus offers a clear buy rating for the growing stock profitability of AOSL.
Micron Technology Inc (MU)
Micron Technology, Inc (MU) is an American semiconductor and technology company that specializes in and manufactures computer memory and data storage. Some of MU‘s available services include Flash memory, dynamic random-access memory (DRAM), and USB flash drives. Crucial and Ballistix are two of MU‘s consumer brands. Ward D. Parkinson, Joseph Leon Parkinson, Dennis Wilson, and Doug Pitman started the corporation on October 5, 1978, and it is based in Boise, Idaho.
Like AOSL, MU has easily bested Wall Street analysts’ earnings projections for the last four fiscal quarters in a row. MU recently surprised the market by exceeding EPS estimates by 8.12% and revenue expectations by 3.21%. MU shows robust year-over-year numbers, with revenue growth of 24.86% and EPS growth of 277.36%. For 2022 and 2023, MU is projected to increase overall revenues by 20%. MU currently has a dividend yield of 0.54%, with a quarterly payout of 10 cents per share. From analysts issuing 12-month price projections, MU has a median target of 114.00, a high of 165.00, and a low of 83.00. The estimate is up 58.53% from its last price, and MU comes with a virtually uncontested buy rating that shouldn’t go without notice.
