Intel Corporation (NASDAQ:INTC) might be one of the most prominent chipmakers in the U.S., but Chinese companies are rapidly increasing the competition. Allwinner, a Chinese chipmaker, became the number two tablet-processer in 2012, well ahead of Intel at number six. However, despite the increased competition in the inexpensive tablet market, analysts are still counting on Intel to forge ahead, including Jefferies analyst Sundeep Bajikar.
Sundeep recommended BUY Intel Corporation (NASDAQ:INTC) after meeting with the company’s president and learning that “the company was on track to take share in the tablet market, and reduce OpEx and CapEx spending over the next several years.” Sundeep agreed with Intel’s strategy of “going after the low end in tablets first and then disrupting from the bottom up. Management indicated that it had line-of-sight visibility into 40 million units of tablet MPU shipments this year through design wins, but did not yet have the orders.”
Last year was a banner year for hedge funds in general, as the industry attracted $31 billion worth of net inflows, according to data from HFM. That total included a challenging fourth quarter, in which investors pulled more than $23 billion from hedge funds. HFM reported $12 billion in inflows for the first quarter following Read More
Sandeep’s confident recommendation comes from his history recommending semiconductor companies including, Micron Technology, Inc. (NASDAQ:MU) and SanDisk Corporation (NASDAQ:SNDK). Sundeep’s successful recommendations have earned him the 149 spot out of 2451 analysts, with a 4.5% average return over S&P-500 and a 68% success rate of recommendations.
In January, Sundeep recommended BUY SanDisk (SNDK) with an $85 price target. Sundeep noted, “DRAM and NAND updates from Samsung and SK hynix further reinforce our Moore Stress thesis, and we continue to expect CY14 supply bit growth to be limited,” adding that, “We also continue to believe a secular mix shift to Enterprise SSD is likely to help SanDisk’s ASPs and gross margins outperform those of its NAND peers, prompting investors to increasingly compare SanDisk with Enterprise Storage companies like EMC and NetApp.” This recommendation has earned Sundeep +2.5% over S&P-500.
When it comes to recommending SanDisk, Sandeep has a 100% success rate, including another successful recommendation from last July. When the company beat Street expectations for Q2, Sundeep raised his price target from $70 to $71 arguing, “Our investor conversations indicate elevated desire to sell memory stocks, in part due to an uptick in equipment purchases reported by semiconductor equipment suppliers at Semicon West last week, stock price appreciation, and cyclical factors.” This recommendation earned Sundeep +7.0% over S&P-500.
Sundeep also saw success when recommending Micron Technology (MU) in October of 2013. Sundeep reiterated his BUY MU rating with a $30 price target noting, “Based on our analysis of HDD consolidation using the Herfindahl-Hirschman Index (HHI), we believe structural changes that occurred in industry DRAM supply over the last year due to Moore Stress, are permanent.” Sundeep walked away with +32.5% over S&P-500.
However, shortly after this recommendation, Sandeep reiterated his BUY MU rating, but it was not been as successful. After seeing strong Q1 results with “massive gross margin expansion,” Sundeep recommended BUY MU. Sandeep argued, “We expect industry DRAM and NAND supply to decelerate again in CY14, helped in part by Samsung’s focus on disrupting TSMC in Foundry, and Micron’s gross margin expansion to continue, in spite of near-term softness in NAND.” However, as of right now, Sandeep is experiencing -0.3% over S&P-500, remaining hopeful that the stock will start to rise and bring him a positive return.
Despite international pressure, Sandeep is still recommending BUY Intel Corporation (NASDAQ:INTC) with the support of years of experience in the semiconductor sector. To continue following Sandeep’s recommendations about Intel, as well as other companies, be sure to download TipRanks, and start making informed decisions with advice you can trust.