Additional Trading Ideas:
In addition to tonight's new candidate(s), consider these stocks as possible trading ideas and watch list candidates. Some of these may need to see a break past key support or resistance:
Bullish ideas: FSLR, IPG, FIX, DHI, MS, SIX,
Bearish ideas: TWTR, TGI, HAIN, CERN, DKS
NEW BULLISH Plays
Qorvo, Inc. - QRVO - close: 59.54 change: +1.45
Stop Loss: 55.75
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on December -- at $---.--
Listed on December 05, 2015
Time Frame: Exit prior to earnings in late January
Average Daily Volume = 2.2 million
New Positions: Yes, see below
2015 has been a bumpy ride for QRVO investors. Fortunately the stock appears to have found a bottom over the last few months. Right now semiconductors are in rally mode. We could see QRVO break through key resistance soon.
QRVO is in the technology sector. According to the company,
"Qorvo is a leading provider of core technologies and RF solutions for mobile, infrastructure and aerospace/defense applications. Qorvo was formed following the merger of RFMD and TriQuint, and has more than 7,000 global employees dedicated to delivering solutions for everything that connects the world. Qorvo has the industry's broadest portfolio of products and core technologies; world-class ISO9001-, ISO 14001- and ISO/TS 16949-certified manufacturing facilities; and is a DoD-accredited 'Trusted Source' (Category 1A) for GaAs, GaN and BAW products and services."
The company has beaten Wall Street's estimates on both the top and bottom line the last three quarters in a row. Their most recent report was November 5th. QRVO announced their Q3 results with earnings of $1.22 a share. That was 11 cents above estimates. Revenues were up +11.6% to $707 million, above the $699 million estimate. The quarter was driven by a +19% jump in their mobile products segment.
QRVO's President and CEO Bob Bruggeworth commented on the quarter,
"The Qorvo team delivered a solid September quarter, with quarterly revenue increasing 12% year-over-year, led by strong 19% year-over-year growth in Mobile Products. Design activity during the quarter was particularly robust, as we secured multiple opportunities to expand content in the marquee smartphones launching in calendar 2016 and 2017 and positioned IDP to accelerate growth across its target markets." Steve Buhaly, chief financial officer, said, "In the nine months since Qorvo's formation, revenue has grown 25% from the same period in the prior year while non-GAAP operating income has nearly doubled. We're proud of this performance and are excited about our opportunities in the coming year."
QRVO management raised their Q4 EPS guidance above analysts' estimates but their revenue guidance was below Wall Street expectations. They also announced a one-year $1 billion stock buyback program, which suggest that management believes their stock is too cheap. Shares soared to multi-week highs the next day (Nov. 6th).
Previously there was some concern about Apple's iPhone sales and their impact on QRVO since QRVO is a major component supplier to Apple. Wall Street has been worried that Apple's iPhone sales would slow down, which helped pressure QRVO's stock lower. The company's generally optimistic guidance for Q4 helped soothe these fears. Investors should be aware that QRVO's stock could be sensitive to any news regarding AAPL's iPhone sales.
Technically QRVO's stock is in a new bull market with a rally from its lows near $42. The point & figure chart is bullish and forecasting at $67 target. At the moment QRVO is hovering just below round-number resistance at $60.00. Tonight we are suggesting a trigger to launch bullish positions at $60.25. I will point out that prior support from early 2015 in the $63.00 area is potential resistance but we are expecting a rally toward the $70 area.
Trigger @ $60.25
- Suggested Positions -
Buy QRVO stock @ $60.25
- (or for more adventurous traders, try this option) -
Buy the FEB $65 CALL (QRVO160219C65) current ask $3.30
option price is a current quote and not a suggested entry price.
Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.
Option Format: symbol-year-month-day-call-strike