Semiconductor Industry Poised for Leadership Role in Year-End: Jim Cramer

Strategic Insights -

The semiconductor industry is the one to watch for year-end, with shares of key players Avago, Intel, Skyworks, and Qorvo "sneaking up" as Texas Instruments reports blowout third-quarter earnings results. Analysts downgrades tend to be unpopular in December, making it a strong month for stocks. Jim Cramer points out that Broadcom's proposed merger with Avago will be a fantastic addition to the sector, which has seen multiple acquisitions this year.

Key Takeaways:

  • The semiconductor industry is expected to be a leadership group in the year-end, according to Jim Cramer.
  • Shares of Avago, Intel, Skyworks, and Qorvo are increasing as Texas Instruments reported "blowout numbers" for its third-quarter earnings results.
  • Broadcom's proposed merger with Avago will be a significant addition to the sector, which has seen multiple acquisitions this year.
  • December is typically a strong month for stocks due to the tendency of analysts to be less critical during this time, resulting in less downgrades.
  • Analyst downgrades are unpopular in December, which suggests that some analysts may "get behind" the semiconductor industry, leading to an "explosion" of stock values.
  • INTEL CORP is rated as a Buy by TheStreet Ratings team, which highlights the company's solid financial position, attractive valuation levels, good cash flow from operations, notable return on equity, and expanding profit margins.
  • INTC's current debt-to-equity ratio is 0.36, which is low and below the industry average, indicating successful debt management.
  • The company has a quick ratio of 1.66, demonstrating its ability to cover short-term liquidity needs.
  • INTC's return on equity has improved slightly compared to the same quarter one year prior, which can be considered a modest strength in the organization.
  • The company has underperformed the industry average on the basis of return on equity but has exceeded the S&P 500 average.
  • INTC's net operating cash flow has remained constant at $5,735.00 million with no significant change when compared to the same quarter last year.
  • The company has modestly surpassed the industry average cash flow growth rate of -6.86%.
  • INTC's gross profit margin is very high, coming in at 78.24%, although it has decreased from the same period last year.
  • The net profit margin of 21.49% trails the industry average.

Statistics:

  • Avago's shares are increasing in value as the semiconductor industry grows.
  • Texas Instruments reported blowout third-quarter earnings results.
  • Broadcom's proposed merger with Avago will add significant value to the sector.
  • December is typically a strong month for stocks due to analyst downgrades being unpopular.
  • INTC's current debt-to-equity ratio is 0.36, which is low and below the industry average.
  • INTC's quick ratio is 1.66, demonstrating its ability to cover short-term liquidity needs.
  • INTC's return on equity has improved slightly compared to the same quarter one year prior.
  • INTC's net operating cash flow is $5,735.00 million with no significant change when compared to the same quarter last year.
  • INTC's cash flow growth rate is 6.86% higher than the industry average.

Sources:

  • Jim Cramer, CNBC's Squawk on the Street
  • TheStreet Ratings Team, INTEL CORP rating report
  • Avago (AVGO) quarterly earnings results
  • Texas Instruments (TXN) quarterly earnings results
  • Broadcom's (BRCM) proposed merger with Avago
  • Jim Cramer's comments on December being a strong month for stocks
  • INTC's financial reports and statements.