Top Picks 2018: ON Semiconductor (ON)

01/11/2018 5:00 am EST


Richard Moroney

Editor, Dow Theory Forecasts

ON Semiconductor (ON), our top pick for the coming year, is a small player in the volatile, highly cyclical semiconductor industry, explains Richard Moroney, editor of Dow Theory Forecasts.

The company makes sensors and power-management components in automotive, industrial, and computing products.

The stock earns a value score of 86 (out of 100) in or proprietary Quadrix ranking system and trades at a substantial discount to the semiconductor group on most valuation ratios.

Given the company’s operating momentum, the appealing valuation is a bit of a surprise. The firm’s sales rose more than 50% and its per-share profits more than doubled over the last year, helped by an acquisition.

Profit margins extended a multiyear uptrend. The company reported solid pricing power and continued strong demand trends in the most recent quarter. Analysts target profit growth of 27% for the December quarter and 15% for 2018.

Subscribe to Richard Moroney's Dow Theory Forecasts here…

  By clicking submit, you agree to our privacy policy & terms of service.

Related Articles on TECHNOLOGY

Keyword Image
Top Picks 2019: Ciena (CIEN)
01/17/2019 5:00 am EST

Ciena Corporation (CIEN) is a well-managed networker, and compared to its peers, and actually well d...

Keyword Image
Top Picks 2019: Twilio (TWLO)
01/16/2019 5:00 am EST

Even with a macroeconomic outlook that seems less certain than the past few years, I'm still particu...