Latest news with #semiconductors
Yahoo
10 hours ago
- Business
- Yahoo
Unusual Call Options Activity in Marvell Technology Highlights the Value of MRVL Stock
Today, Marvell Technology, Inc. (MRVL) is having heavy, unusual call options volume (out-of-the-money calls) after reporting strong earnings results yesterday for its fiscal Q1 ending May 3. This highlights the value of the system-on-a-chip semiconductor designer and MRVL stock. MRVL stock is at $75.08, up over 7% in morning trading. However, the stock is still well off its highs from earlier in the year. It could have significantly more upside, as will be seen in this article. How to Use Barchart's Tools to Create My Favorite Low-Risk, High-Reward Options Trades 2 Option Ideas to Consider this Wednesday for Bearish Traders Unusual Call Options Activity in Marvell Technology Highlights the Value of MRVL Stock Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! Marvell reported +63% revenue growth Y/Y, propelled by strong data center-related growth for its cloud and AI server products. Moreover, revenue rose to almost $1.9 billion, up by +4.27% from the prior quarter. This led to very high free cash flow (FCF), despite higher capex spending. For example, operating cash flow (OCF) was $332.9 million, up +2.6% over last year's $324.5 million FCF. After deducting $118.8 million, FCF came in at $214.1 million. That represents 11.2% of its $1.895 billion revenue for the quarter, a very strong FCF margin. On an adjusted FCF basis (including asset sales, etc.), FCF came in at $238.8 million, or 12.6% of sales. That was 7.1% higher than last year's $223 million adj. FCF. This was despite significantly higher capex spending this quarter (i.e., $119m vs. $91.5m last year, or +30%). As a result, we can project higher FCF going forward. For example, analysts project revenue this year of $8.25 billion (+43%) and $9.78 billion next year, using 37 analysts' estimates. This implies a next 12-month (NTM) run rate of $9.015 billion. As a result, we can project FCF using the company's most recent higher FCF margin: $9 billion x 12.6% FCF margin = $1.134 billion FCF That is much higher than a simple 4x projection using the Q1 FCF. For example, $238.8m Q1 FCF x 4 = $955.2 million FCF $1,134m FCF / $955.2m = 1.187 = n+18.7% Therefore, MRVL stock could end up with an 18.7% higher market value over the next 12 months. Let's test that. For example, right now, MRVL has a market cap of $64.55 billion. That represents 67.6x the run rate projection of $955m. Another way to say this is that the stock has a 1.50% FCF yield (i.e., the reciprocal of 67.6x). This means that its NTM market cap could be significantly higher: $1.134b NTM FCF / 0.015 = $75.6 billion That is 17.1% higher than today's market value of $64.55 billion. In other words, MRVL stock is worth $87.92 per share: $75.08 p/sh x 1.171 = $87.92 per share So, no wonder investors are buying calls today (and, alternatively, selling out-of-the-money calls). This can be seen in Barchart's Unusual Stock Options Activity Report. It shows that for the period ending June 20, over 7,000 call option contracts have traded at the $79.00 strike price. That is higher than the trading price and implies that buyers feel the stock will rise over the next two days. Alternatively, it also shows that holders of MRVL stock are willing to sell their shares at $79.00 and receive a bid-side premium of 70 cents. That represents a covered call yield of 93 basis points (i.e., $0.70/$75.36 = 0.0093 = 0.93%). In any case, this shows that investors are bullish on MRVL stock. By the way, analysts agree that MRVL stock looks undervalued. For example, Yahoo! Finance reports that 41 analysts have an average price target of $89.24 per share. Similarly, Barchart's mean survey is $91.31. These are close to my FCF margin and FCF-yield-based price target of $87.31 per share (see above). In fact, which tracks recent sell-side analysts' price recommendations, shows that 29 analysts have an average target price of $90.61 per share. The bottom line is that either from a FCF analysis basis or using analysts' price targets, MRVL stock looks deeply undervalued. So, no wonder investors are trading out-of-the-money MRVL call options in heavy volume. On the date of publication, Mark R. Hake, CFA did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
11 hours ago
- Business
- Bloomberg
TSMC Shares Trail Smaller Peer UMC After High-Dividend ETF Snub
Taiwan Semiconductor Manufacturing Co. 's stock is lagging smaller rival United Microelectronics Corp. after being brushed aside by some of Taiwan's biggest yield-focused exchange-traded funds. Shares of TSMC, the world's largest contract chipmaker, have dropped 3.7% this year, compared to an 11% gain for UMC, according to data compiled by Bloomberg. UMC's dividend yield of more than 6% has given it substantial exposure to Taiwan's high-dividend ETFs, which collectively manage more than $44 billion in assets, Bloomberg data show.
Yahoo
11 hours ago
- Business
- Yahoo
5 Singapore Stocks Hitting Their 52-Week Highs: Should They Be on Your Watchlist?
Sentiment has improved considerably after the initial fears over Trump's raft of tariffs. The Straits Times Index (SGX: ^STI) has rebounded strongly and is just below the 4,000 level as I write this article. As a result, several companies have hit their 52-week highs as investors turn optimistic about their prospects. However, should you add the five companies below to your buy watchlist? Let's take a deeper dive to find out. Grand Venture Technology, or GVT, is a manufacturing solutions and services provider for the semiconductor, electronics, aerospace, and medical industries. GVT's share price has climbed 12.7% year-to-date (YTD) to S$0.94, just shy of its 52-week high of S$0.96. The group announced a solid set of earnings during its first quarter of 2025 (1Q 2025) business update. Revenue jumped 44.8% year on year to S$44.6 million while gross profit improved by 40.3% year on year to S$11.1 million. GVT saw double-digit year-on-year revenue increases across all three of its divisions. Net profit increased by 27.7% year on year to S$2.6 million. Management sees artificial intelligence (AI) and high-performance computing (HPC) as long-term structural growth drivers that will benefit its business. Beyond semiconductors, GVT also expects resilient demand from life sciences customers and is deepening its value proposition for the aerospace sector in China. These trends and initiatives should open up more strategic opportunities for the group to continue growing its top and bottom lines. SIA Engineering, or SIAEC, is a maintenance, repair, and overhaul (MRO) specialist for the airline industry. The group also provides line and base maintenance services for major airlines. SIAEC's share price has trended higher since hitting a low of S$1.91 in April 2025. Shares of the MRO specialist are now up 37% YTD and recently hit a 52-week high of S$3.28. The group reported a sparkling set of earnings for its fiscal 2025 (FY2025) ending 31 March 2025. Revenue climbed 13.8% year on year to S$1.2 billion while operating profit came in at S$14.6 million. SIAEC's share of profits from associates and joint ventures improved by 17.4% year on year to S$118.6 million. As a result, net profit surged 43.8% year on year to S$139.6 million. A final dividend of S$0.07 was proposed, bringing FY2025's total dividend to S$0.09, one cent higher than FY2024's S$0.08. The MRO industry continues to enjoy sustained demand, and the impact from Trump's tariffs is limited for now. Late last month, SIAEC signed a S$1.3 billion service agreement with Singapore Airlines (SGX: C6L) and Scoot. This agreement is effective from 1 April 2025 for a term of two years with an option to extend for a further year. Keppel is a global asset manager and operator with solutions that serve customers in the infrastructure, real estate, and connectivity sectors. The blue-chip group saw its share price rise 7.3% YTD, and it recently hit its 52-week high of S$7.50. There could be more momentum for the stock as Keppel released an encouraging 1Q 2025 business update. 1Q 2025's net profit (excluding legacy offshore and marine assets) increased by more than 25% year on year. Of this net profit, 80% was made up of recurring income. Asset management fees also rose 9% year on year to S$96 million for the quarter, and Keppel recorded S$347 million of assets monetised to date. The group also grew its funds under management (FUM) and targets to hit S$100 billion of FUM by the end of 2026 and S$200 billion by 2030. Some of these long-term objectives are encapsulated in Keppel's 2025 Investor Day presentation, and the group is working towards its Vision 2030 goals to grow its core earnings and increase its proportion of recurring income. Sembcorp Industries, or SCI, is an energy and urban solutions provider with a balanced energy portfolio of 25.1 GW across 11 countries. SCI also has urban development projects that span 14,400 hectares across Asia. SCI's share price has shot up nearly 27% YTD and recently hit its 52-week high of S$7.11. The utility group managed to report a resilient core net profit of S$1 billion for 2024, even though revenue dipped by 9% year on year to S$6.4 billion. The lower revenue was because of the planned maintenance shutdown of a Singapore cogeneration plant, along with a decline in Singapore wholesale electricity prices. Despite the flat profit, SCI more than doubled its final dividend from S$0.08 to S$0.17, taking the total 2024 dividend to S$0.23. The group has also announced several promising business developments recently. In late May, SCI secured its second solar-energy storage hybrid project in India for a contracted capacity of 150 MW. And in mid-June, the group was awarded its first round-the-clock power project, also in India, to integrate approximately 300 MW of installed capacity comprising solar, wind, and battery energy storage solutions. Lum Chang is a construction group with businesses in property development and investment. Its construction projects include a wide variety of property types such as commercial, residential, industrial, and infrastructure projects. Lum Chang's share price has risen 19% YTD to hit its 52-week high of S$0.35. The construction group reported a mixed set of earnings for the first half of fiscal 2025 (1H FY2025) ending 31 December 2024. Revenue inched up 3% year on year to S$239 million, but gross profit slid 12% year on year to S$19.4 million because of higher cost of sales. Net profit dipped 4% year on year to S$3.5 million. Despite the lower profit, Lum Chang generated a positive free cash flow of S$73 million, reversing the prior year's negative free cash flow. The group quadrupled its interim dividend from S$0.005 to S$0.02 and expects the award of contracts for several large-scale developments, including Changi Airport Terminal 5 and the expansion of the Marina Bay Sands Integrated Resort. We've found 5 SGX-listed dividend stocks with strong track records in turbulent markets. If you want consistency in an uncertain world, start here. Follow us on Facebook, Instagram and Telegram for the latest investing news and analyses! Disclosure: Royston Yang does not own shares in any of the companies mentioned. The post 5 Singapore Stocks Hitting Their 52-Week Highs: Should They Be on Your Watchlist? appeared first on The Smart Investor. Sign in to access your portfolio
Yahoo
12 hours ago
- Business
- Yahoo
Texas Instruments commits $60B to domestic chip manufacturing
This story was originally published on CIO Dive. To receive daily news and insights, subscribe to our free daily CIO Dive newsletter. Texas Instruments plans to spend more than $60 billion to increase chip production domestically, according to a Wednesday announcement. The initiative represents the 'largest investment in foundational semiconductor manufacturing in U.S. history,' the company said. The nearly century-old technology provider will build seven semiconductor fabrication facilities across three manufacturing 'mega-sites' located in Texas and Utah. The plants will produce analog and embedded processing chips for Apple, Ford, Medtronic, Nvidia and SpaceX as part of the initiative, the company said. Texas Instruments was awarded $1.6 billion in CHIPS and Science Act funding last year. Despite President Donald Trump's efforts to undo the Biden-era legislation, his administration lent its support to the Texas Instruments initiative. 'President Trump has made it a priority to increase semiconductor manufacturing in America — including these foundational semiconductors that go into the electronics that people use every day,' U.S. Secretary of Commerce Howard Lutnick said in the Wednesday announcement. Texas Instruments' buildout plan comes amid compute consumption spikes spurred by AI adoption and concurrent enterprise modernization efforts. Hyperscaler infrastructure investments drove an 18% year-over-year increase in semiconductor revenue globally last year, according to Gartner. The analyst firm anticipates the massive market to climb at least another 11% this year to over $700 billion. The three largest cloud providers — AWS, Microsoft and Google Cloud — reported compute capacity constraints as enterprises ramped up AI projects last year, triggering a wave of multi-billion-dollar hyperscale data center investments. Oracle, a junior member of the hyperscale club, saw capital expenditures more than double to over $20 billion during its fiscal year, which ended May 31. Texas Instruments' manufacturing push has geopolitical dimensions, as well. President Trump made a domestic manufacturing rebuild central to his administration's policy objectives, and the technology sector has responded. In April, amid confusion and uncertainty triggered by Trump administration tariffs, IBM announced plans to invest $150 billion over the next five years in domestic research, development and manufacturing. Nvidia — one of the biggest beneficiaries of the data center building boom — pledged $500 billion to bolstering domestic chip manufacturing in April. The GPU giant has seen quarterly revenues skyrocket to more than $40 billion, up from under $6 billion two-and-a-half years ago. Texas Instruments hasn't been as fortunate. The company reported $4.1 billion in revenue during the first three months of the year, up 11% compared to Q1 2024. With the Trump administration threatening levies on semiconductor imports, Texas Instruments President and CEO Haviv Ilan indicated the company would shift manufacturing from foundries in Taiwan to a plant in Lehi, Utah, during a recent earnings call. Texas Instruments is ramping up production this year in Utah and Texas facilities as it continues to build capacity. The timeline for the $60 billion investment will be based on business demand, a spokesperson told CIO Dive. Recommended Reading Hyperscalers bet on costly new data centers to capture growing market Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15 hours ago
- Business
- Yahoo
3 Mutual Funds to Buy on Continued Growth in Semiconductor Sales
Semiconductor sales have been steadily rising over the past year, largely driven by the enthusiasm surrounding artificial intelligence (AI), particularly generative AI. Robust demand across multiple industries has led to significant revenue growth in the semiconductor sector over recent quarters. In fact, the semiconductor industry, a key segment of the broader tech market, played a key role in powering last year's market upswing. Given these positive trends, investing in semiconductor-focused mutual funds — such as DWS Science and Technology A KTCAX, Fidelity Select Technology Portfolio FSPTX, and Red Oak Technology Select ROGSX — may be a smart move. According to the Semiconductor Industry Association (SIA), global semiconductor sales jumped a solid 2.5% sequentially in April, hitting $57 billion, up from $55.6 billion in March. Year over year, sales grew 22.7%. This marked the 11th consecutive month of year-over-year growth above 17%. SIA President and CEO John Neuffer said, 'Global semiconductor sales in April ticked up on a month-to-month basis for the first time in 2025, and the global market continues to notch year-to-year growth driven by increasing sales into the Americas and Asia Pacific.' The initial decline in monthly sales this year was sparked by uncertainties over the future of U.S. tech companies in AI following the launch of the low-cost Chinese AI model DeepSeek. However, concerns eased quickly, with many experts viewing the launch as overly hyped. The solid April performance followed an impressive 2024, when global semiconductor sales reached $627.6 billion, reflecting a 19.1% increase over 2023's $526.8 billion. Fourth-quarter sales alone grew 17.1% year over year, totaling $170.9 billion. The growth was largely fueled by rising demand for semiconductors in data centers, with memory chips contributing significantly to revenues. As tech firms continue to invest heavily in AI, the semiconductor industry is expected to benefit further. Experts predict strong demand to continue into 2025, with the SIA anticipating double-digit sales growth. We have, thus, selected three mutual funds with significant exposure to semiconductor producers. These funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) and are poised to gain from the above factors. Moreover, these funds have encouraging three- and five-year returns. Additionally, the minimum initial investment is within $5000. We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund. The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money). DWS Science and Technology A fund seeks growth of capital. Under normal circumstances, KTCAX invests at least 80% of its net assets in common stocks of U.S. companies in the technology sector. DWS Science and Technology A fund has a track record of positive total returns for over 10 years. Specifically, KTCAX's returns over the three and five-year benchmarks are 18.6% and 17.1%, respectively. DWS Science and Technology A fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.88, which is lower than the category average of 1.03%. To see how this fund performed compared to its category and other #1 or 2 Ranked Mutual Funds, please click here. Fidelity Select Technology Portfolio fund seeks capital appreciation by investing most of its assets in common stocks of companies principally engaged in offering, using, or developing products, processes, or services that will provide or benefit significantly from technological advances and improvements. Specifically, Fidelity Select Technology Portfolio's returns over the three and five-year benchmarks are 15.7% and 18.3%, respectively. FSPTX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.62%, which is lower than the category average. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here. Red Oak Technology Select fund seeks long-term capital growth by investing primarily in stocks of companies that rely extensively on technology in their product development or operations, or which may be experiencing growth in sales and earnings driven by technology-related products and services. ROGSX primarily invests in technology companies that develop, produce, or distribute products or services related to computers, semiconductors and electronics. Red Oak Technology Select fund's returns over the three and five-year benchmarks are 12.8% and 13.5%, respectively. ROGSX carries a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.92% To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here. Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (FSPTX): Fund Analysis Report Get Your Free (ROGSX): Fund Analysis Report Get Your Free (KTCAX): Fund Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
