Microcontroller and touch specialist Atmel (ATML)
had a bumpy 2013, but rode a solid wave of enthusiasm into the recent
Consumer Electronics Show that has the stock up more than 10%
year-to-date. I see some solid reasons to be optimistic about the
company's efforts in touch, as well as its underappreciated MCU
business. The pace and magnitude of gross margin improvements are
significant unknowns, though, and there is ample competition in the
touch space.
Atmel is not the cheapest chip stock out there, but
progress with touch control and sensor attach rates will likely be
well-rewarded by the market. Double-digit free cash flow growth can
support a fair value in the $9.50 to $10 range, and although I can't
make as strong of a valuation-based call here as I might like, I think
the set up for 2014 is attractive.
Continue to the full article here:
Atmel Looks To Maintain Its Momentum Post-CES
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