This information is on the RF Micro Devices stock (RFMD) and is up to date as of 3/26/2013
As of late, i have decided it is time for me to start learning about different investing and trading strategies, rather than the traditional buy and hold. So, for now, I am going to focus on finding investment opportunities using the principles of gap trading and looking at stocks that have a price gap from the previous close. The volatility and speculation immediately following a gap provides as the perfect entry point. However, there is a caveat. Regardless of what causes the gap, you must still abide by the rules of your fundamental analysis and deemed the instrument worthy of purchasing for the long run. So, in essence, your fundamental analysis always trumps any day to day fluctuations in price, including gaps.
Rf Micro Devices Stock: News
On March 26th, 201, at the time of me writing this, RF micro devices stock gapped up by 6.13% or a change in price of $0.30. This gap was primarily due to a number of banks, the big one being Oppenheimer, upgrading RFMD to an Outperform rating from a Perform. They also set the price target to $7 a share. As of now, the 52-week price range for RFMD has been $3.45 – $5.43.
Rf Micro Devices Stock: Technical
From a technical perspective, RFMD looks to be in a prime spot for a move upwards. First and foremost, RF Micro Devices stock has been displaying bullish momentum with both the 10, 20 and 50 day SMA’s trending higher.
There is also currently a put/call ratio of .40, which means investors are currently extremely bullish and betting on a huge upside for RFMD going forward. It’s not always a smart idea to follow other investors, but it does help provide insight on what others think about the stock in question.
Rf Micro Devices Stock: Fundamentals
RF Micro Devices is not a profitable company and not everything about their financial statements is that appealing. But, RFMD has managed to cut their long term debt from $600 million in 2008 to just $119 million recently. Plus, RFMD is currently holding over $300 million in cash for short term investments, including their recent announcement of a new sourcing strategy for Gallium Arsenide.
As for their recent quarterly earnings, RFMD earnings of $0.08 were announced on 1/22/2013. With 20 analysts covering RFMD, earnings were 31.15% greater than the consensus estimate of $0.061. Another point of good news.
- Given that RFMD has been free-cash-flow positive for several years now and beat analyst estimates in recent quarters, we can conclude it is relatively healthy and displaying good financial management for future growth.
Rf Micro Devices Stock: Future Growth
A great thing about RF Micro Devices is the simple fact that by supplying parts and technology for phones, smartphones and tablet industry, its revenue is directly tied to an industry which is expanding rapidly. Even better is the fact that RFMD is not solely dependent (only a small percentage of their revenue) on the success of Apple and the IPhone like many of the other mobile device suppliers. Instead, RFMD has managed to become a major supplier for Nokia, which has found success in markets outside of the United States.
- But, having your future tied with Nokia is also not a great prospect. Even though they have found some success, Nokia may be in trouble as smartphones gain more traction around the world and their market share in China has been shrinking.
RF Micro Devices has also recently announced their plans for a new Gallium Arsenide, a compound element of gallium and arsenic that is used in semiconductors and has superior electronic properties than silicon, sourcing strategy. This new strategy is intended to increase manufacturing options for the company, increase the gross margin and support aggressive growth.
Rf Micro Devices Stock: Verdict
I’m not really sure what I want to personally do with the RF Micro Devices stock. Everyone has different strategies, goals and investment calculations. You just need to do your own digging and figure out whether this stock fits within your trading rules.
Personally, I am going to wait a few days to see if RFMD continues to move upward and reaches an overbought position. If it does, we will probably see some selling and a decrease in price. I would use that sell off as my entry point and look to hold for the long term.
About RF Micro Devices (RFMD)
RF Micro Devices, Inc. designs, develops, manufactures, and markets radio frequency (RF) components and compound semiconductor technologies primarily in the United States and Asia. Its products enable mobility, as well as provide connectivity and support functionality in the mobile devices, wireless infrastructure, wireless local area networks, cable television /broadband, Smart Energy/advanced metering infrastructure, and aerospace and defense markets. The company offers products that range from single-function components to highly integrated circuits and multi-chip modules (MCMs). Its integrated circuit products include gain blocks, low noise amplifiers, power amplifiers (PAs), receivers, transmitters, transceivers, modulators, demodulators, attenuators, switches, frequency synthesizers, and voltage-controlled oscillators (VCOs); MCM products comprise PA modules, switch-filter modules, active antenna products, VCOs, phase-locked loops, coaxial resonator oscillators, variable gain amplifiers, hybrid amplifiers, and power doublers; and passive components consist of splitters, couplers, mixers, and transformers, as well as isolators and circulators. The company markets its products to original equipment manufacturers and original design manufacturers. RF Micro Devices, Inc. was founded in 1991 and is headquartered in Greensboro, North Carolina.