NXP Semiconductors (NXPI)

(Top Pick Feb 19/15, Down 17.53%) It is getting caught up in the AAPL-O supplier downdraft. They make the finger touch control. They are also in the automotive business for semiconductors and that will grow for them as they just closed an acquisition in this sector. It’s at about 12 times earnings so he is happy to continue owning it.

Semiconductors were one of the most resilient sectors in the market leading up to the ultimate crack in December. This stock topped out last June, and has been making lower highs since then. Near field communications is a great technology, but there will be better spots. If he were looking at semiconductors, he would be look at something like Nvidia (NVDA-Q), or in the capital equipment space, KLA-Tencor (KLAC-Q). These are the 2 strongest in the semiconductor space. As we go through this correction there is still some risk in the short run, but it is a group that generally turns higher quickly, as the market starts to find a footing.

(Top Pick Nov 17’14, Down 7.69%) Credit card chips and payment chip inside the iPhone 6 and they make chips in your car. They announced an acquisition that closed last fall. Then the concerns of China came up. They have been dragged down by Apple concerns.

You have to be fairly active as an investor in these companies. He got stopped out. It broke down decisively at $90 and had not re-established itself. He watches it, however. You might look at XSD-N.

(A Top Pick Feb 19/15. Up 6.27%.) Just after he was on the program, they acquired Freescale, which is still in an ongoing process through FDC. The stock reacted very positively to this. Unfortunately, the whole semiconductor group has come under a little bit of pressure with respect to pricing. Also, this is an Apple (AAPL-Q) supplier, and a lot of the Apple supply chain has had some volatility. At 14X next year’s earnings, this is a very cheap stock.

(Top Pick Nov 17/14, Up 26.44%) The chip that goes into the iPhone 6 for Apple-pay and the chip in credit cards. US consumers are only just getting to chip cards. There is some risk with their recent acquisition in terms of regulatory risk. They had to spin off a couple of divisions that were giving them too much market share. Great growth prospects and a great management team.

Have a couple of neat product categories, but the one that most people know them for is the little silver chip on credit cards. It is also on the iPhone 6 for Apple pay. Credit card with chips is just rolling out in the US. Have a big acquisition closing later this year with Freescale Semiconductor (FSL-N) which will be very, very positive for them. This will make them #1 in automotive. The stock has pulled back with the general tech pullback and mid-$90 is an excellent entry point.

Semiconductors. Cyclical, but it doesn’t matter what oil does. It is the number of new tablets or cell phones and the number of new cars with all the new sensors. They are acquiring Free Scale that will make them one of the largest automotive semiconductor manufacturers in the industry. It is much undervalued. There is no dividend and a lot of leverage that will come down.

Reported some great numbers in March and the stock jumped from about $85 to $100, and then based with the semiconductor group over the last while. In the most recent market weakness, the last 4 days really, it has pulled back and is filling in that gap. Technically he would say that there is nothing broken here. Semiconductors have had some pressure on them, but this really has been from 3 companies only. Thinks this one has a very positive future.

(Top Pick Jun. 12/14, Up 72.89%) He would buy it today. They dominate near field communications used in payment cards and terminals. They are the leader. They are in the sweet spot.

Really not a strong period for semiconductors. This is starting to see a downturn. Not a position he would be looking at. If it drops below the trend line where it is right now, he can see further weakness and would be exiting the position.

This is in “near field“ communication chips such as those that go into your Visa card or an iPhone for Apple pay that oil will come to Canada as some point. Also, have a strong position in automotive. Has been one of his big positions in semiconductors for quite some time and he would continue to buy it.

One of his big themes is the “Internet of things”. Estimates are that over the next 5 years, individuals will have as many as 9 mobile devices. A lot will be connected to needed security. This company’s main business is “near field communication” chips, like the chip that is on your visa card or in the Apple iPhone that allows you to use Apple Pay. They recently bought Freescale Semiconductor, the leader in selling chips into the automotive sector. The automotive industry over the next 5 years will average about 10% growth in the use of semiconductors per vehicle. This company could earn as much as a 10% free cash flow yield by 2017. Stock looks expensive at 17X earnings, but the reality is there are a lot of synergies coming out of this deal.

A very well priced semiconductor company. Among its peers it has the 2^nd lowest priced earnings multiple on this and next year’s earnings. Also, has the best PEG ratio (Price to earnings growth). Most importantly, they make the chip that makes Apple Pay (AAPL-Q) work. We are only in the early stages of this. Consumers are demanding that the retail stores have Apple Pay.

Was a bit of a horror story for a while. Post the spin out, it went into private equity. It has come out and he thinks it has been in the right place at the right time. He would call it a consumer focused semiconductor company. Have a very broad product line. The story is in 2 parts. One is a recovery out of a very bad product cycle and was bloated and needed costs taken out of it. That is now behind it. US is starting to consume more, which will be very good for the company. Reasonable balance sheet. Not his favourite, but you will do okay if you buy it. If you are going to buy it do it before the end of the year, because after the 1^st of the year, stocks start to run.