"Buy the pullback" is one of the oft-used pieces of
advice that is easier said than done but can nevertheless be profitable
for patient investors. The semiconductor sector has certainly cooled,
and Renesas Electronics (OTCPK:RNECY)
is likely to see some weak reported results in the near-term, but this
looks like a story that has some legs over the longer term.
Renesas
is certainly looking at more competition in its core auto semiconductor
market, but I wouldn't ignore the strong position it has built for
itself in microcontrollers and SoCs, nor the opportunity to benefit from
significant growth in semiconductor content in the auto sector. With
mid-single-digit long-term revenue growth and low-to-mid teens operating
margins, the stock looks undervalued enough today to merit a closer
look.
Read more here:
Renesas Going Through A Rocky Patch, But The Future Prospects Look Undervalued
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