Semis a BUY at Canaccord

Forbes.com, Winter, 2012. This article was placed on behalf of the U.S. based equity research effort of institutional broker and investment bank Canaccord Genuity. It was part of a series of articles developed under an agreement with forbes.com to work with a variety of contributors and assist them in delivering actionable investment ideas each week. The site, forbes.com is one of the top 500 sites in the world with nearly 10 million subscribers and approximately 100 million page views a month.

Previewing his trip to Taiwan next week, Canaccord Genuity technology analyst Bobby Burleson noted that he expects to find more evidence of recovery in the semiconductor field. Mr. Burleson said:

“Based on improving conditions in the supply chain, we believe semiconductor stocks are likely to trade higher near term as investors begin to bake in a more substantial recovery by Q2. We are overwhelmingly BUY rated on the group, with a particularly positive stance on names with potential for rebounding margins like Fairchild Semiconductor (FCS), improving dividends like Analog Devices (ADI), and product cycles in counter cyclical drivers like Integrated Device Technology (IDTI) via Romley server upgrade.”

He added, “We believe sell-through expectations going into Chinese New Year were more tempered this year given the slowing housing market, macro uncertainties, and reduction in government subsidies. . .We see potential for rush orders following Chinese New Year if sell-through appears to be reasonable and already lean inventory has been depleted. Products likely to sell well include white goods, handsets, desktops, and TVs.”