don't think this was posted:
Non-PC chip stocks ripe to buy -- J.P. Morgan
NEW YORK, March 8 (Reuters) - Chip stocks, particularly those not hard-wired to the PC sector, are ripe for buying thanks to a recovery in the semiconductor sector and recent price declines, according to J.P. Morgan U.S. Equity strategist Douglas Cliggott.
''We view the pullback in the semiconductor group in February as a buying opportunity,'' Cliggott said in a brief, citing strong orders for electronic components and expected earnings growth as prime reasons to increase chip holdings.
''The semiconductor business has gone through two or three years of cyclical misery, but now we are at the beginning of an upturn, probably two to three years worth of good times for chips,'' Terry Ragsdale, J.P. Morgan chip analyst, told Reuters.
Analog Devices Inc. (NYSE:ADI - news), STMicroelectronic (NYSE:STM - news), and Altera Corp. (Nasdaq:ALTR - news) are the most attractive, in part because they are not linked closely to the troubled personal computer sector, where fears of slowing growth sparked recent selling.
''I don't see any kind of meltdown in the PC space, but if I were an investor making incremental investments in (chips), I would be looking at less PC-centric names,'' he said."
''Analog Devices and (STMicroelectronic) are operating at profit margins that are around half of what their peak levels were, and we think over the next four to six quarters, they will go back to the peaks,'' Ragsdale said.
Analog Devices is a leader in the production of digital signal processors -- chips that convert electric signals like sounds, images and radio transmissions into a digital form.
STMicroelectronics makes chips that are used in industrial, telecommunications, and other systems.
Ragsdale rates the three stocks, as well as small-cap chip maker International Rectifier Corp. (NYSE:IRF - news), at buy.
On Monday, shares of Analog Devices rose to 27-1/4, up one, while American Depositary Receipts of STMicroelectronics climbed 2-9/16 to 92-1/8.
Altera shares climbed 1-1/13 to 59-3/8. Shares of International Rectifier slipped 1/16 to 6-11/16.
Invenstors on Monday warmed to stocks of other companies related the chip sector, including Xilinx Inc. (Nasdaq:XLNX - news), up 3-3/16 to 80, Texas Instruments Inc. (NYSE:TXN - news), up 2-1/16 to 102-13/16, and Rambus Inc.(Nasdaq:RMBS - news), up 2-5/16 to 76-5/16.
Intel Corp. (Nasdaq:INTC - news), the world's biggest chip maker, rose 4-1/2 to 119-1/8.
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