2 Semiconductor Stocks Raymond James is Buying

DPW shares have tripled today

Aug 19, 2019 at 2:42 PM
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Stocks are soaring today on upbeat U.S.-China trade headlines and stimulus buzz from overseas. Among individual names making big moves are investment name DPW Holdings Inc (NYSEAMERICAN:DPW), semiconductor supplier ON Semiconductor Corp (NASDAQ:ON), and chipmaker NXP Semiconductors NV (NASDAQ:NXPI). Here's a quick roundup of what's moving the shares of DPW, ON, and NXPI.

DPW Stock Bounces from Record Low

DPW Holdings stock shot into double-digit territory earlier today for the first time since mid-July, last seen up 202% at $6.23. The surge comes in reaction to news the company's subsidiary Digital Power Lending LLC will relaunch its online fintech site, Monthlyinterest.com. The security remains a long-term laggard, though, down 92.5% year-to-date, and fresh off an seven-week losing streak. Plus, DPW shares hit a record low of $1.57 last Friday, Aug. 16.

ON Semiconductor Rallies Into Key Resistance

ON Semiconductor shares have jumped 3.8% to $18.21, rallying as the broader chip sector pops on reports the Trump administration will allow U.S. companies to do business with Chinese telecom firm Huawei for an additional 90 days. An upgrade to "strong buy" from "market perform" at Raymond James is only stoking the bullish flames, with the brokerage firm saying ON's "reasonable valuation ... provides a favorable risk/reward for the stock."

Today's upside has the shares on track for a second straight one-day gain of nearly 4%. However, the rally is being contained near $18.75, which coincides with the stock's +10% year-to-date return, an early August bear gap, and a 38.2% Fibonacci retracement of ON's late-July peak and early August low.

Options traders are hoping for a quick reversal, too. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 1.42 registers in the 90th annual percentile, meaning long puts have been initiated over long calls at a faster-than-usual clip.

Raymond James: NXP Semiconductors "Most Attractive in Group"

Raymond James also upgraded NXP Semiconductors, raising its rating to "outperform" from "market perform." The brokerage firm said it was aware of trade-related risk, but believes "the latest estimate cuts reflect NXP shipments below end market consumption," and called the stock the "most attractive in the group."

NXPI stock was up nearly 3% earlier, but was last seen trading just fractionally higher at $103.59. Following a late-May bounce off their 200-day moving average, the shares have been making a beeline higher atop support from their 120-day trendline, now up 41% year-to-date.

Most analysts are already bullish on NXPI stock. Prior to today, 10 of 16 brokerages maintained a "buy" or better rating, with not one "sell" on the books. Plus, the average 12-month price target of $116.75 sits in territory not seen since June 2018.


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