I bought MCHP, ADI, TXN, NXPI and QCOM as my semiconductor basket.
All of them have a decent focus on semis in autos.
QCOM has big cell phone exposure, which limits growth, but it's cheap. Although it's big into cell phones, it's super dominant in that space, more likely to be the last man standing than to go down with some ship in cell phones. Then they have these other adjacent growth areas (auto, etc.) that are growing rapidly, and every year these new areas should move the QCOM revenue needle more and more. At 10x, what's not to like?
MCHP seems like a blue chip diversified semi stock, massive backlog, cheap, not sure what's wrong with them. It's about 11x now, and growing well despite the economic downturn..
ADI and TXN have great analog businesses, which I think means less competition than other areas of semis. These two (ADI in particular) I think you can buy and just put them away for 5-10 years and then see if nothing has changed.
NXPI has huge auto exposure - I think close to 50% of sales - and the rest is industrial. They're a nice acquisition target probably.
The valuations on all have come down a lot. Only QCOM has the big consumer product exposure that nobody likes. The rest have nice revenue segments (analog, industrial, micro-controllers, etc.). I think none are in hyper competitive markets like memory, PCs, etc. |
