Advanced Micro Devices (AMD)

A very popular stock with the institutional traders. It is priced to perfection, however. He thinks you will be able to buy it at $25 soon. It has beaten Intel pretty hard and other big players. He would recommend waiting to buy on weakness.

He likes it. He likes the secular tailwind. Gaming consoles and data centers get their chips. They are building more differentiated chips from NDVA-Q.

Taking market share from Intel and catching up to it. They just had a breakout from a 10-year range. The chip sector will be fine, but he prefers the communication-chip side.

Intel is too good. AMD is too speculative. It rarely has a positive ROIC, curerntly a weak 6%. Intel has more than double the ROIC.

This is effectively a processing company. In terms of the biggest boss on the street, it would be Intel, and this would be considered the baby in the corner. All the semis are up this year. When you get a cyclical decline in the semi space, and we are long overdue on one of those, that is when you want to buy this. He would just wait now.

(A Top Pick May 4/17. Up 19%.) Basically, the stock was bought at $10.23 and he Sold a Call option on it. That money comes to you immediately, so he’s reduced his cost of the stock to $8.40. This got Called away on Oct 10.

Hasn’t been one of the leaders in a fiery, hot area in the semiconductor space. He would rather own something like Taiwan Semiconductor (TSM-N) or Applied Materials (AMAT-Q) which has dropped down in the last little while. The valuations are not great compared to some of the other names. He would look to other spaces.

A play on chips, Apple devices and hopefully they get into more autonomous vehicles. In the last 3 days, it has dropped about 25%-30%. Morgan Stanley reduced their rating on the company, but Morningstar increased their rating. He thinks you are okay continuing to Hold and see what the next couple of quarters brings.

It is tough to not like on what they have done in one year. Semis have been phenomenal, and this company has been right in there. It has consolidated more in the last little while. He got a little more cautious on tech a number of months ago, when it started to break down on the relative. However, semis have really come on and the numbers are looking okay. He would have a hard time arguing against this one. However, the valuation is tough, which is what would trip him up. He would prefer an ETF that replicates the stocks, and give you a basket approach.

He would want to buy pullbacks to the $10 area. We made a good test in May. A pullback to that level would indicate a buying opportunity.