Can I really complain about the performance of ON Semiconductor (ON)
over the past three months or on year-to-date basis when the shares are
up 50% over the past year and have thumped not only the SOX, but peers
like Texas Instruments (TXN), Infineon (OTCQX:IFNNY), and STMicrolectronics (STM)?
Even so, these shares haven’t done so well lately, and I believe that’s
largely due to concerns that rising lead times are signaling some weak
orders and weaker revenue in the not-so-distant future.
Maybe
this time will be different and the industry will navigate back to more
normal lead times without major order/revenue disruptions. I don’t like
to count on “maybe it will be different”, though, and the awful
performance of Renesas (OTCPK:RNECY)
highlights how unforgiving the market can be when companies go through
an “adjustment phase”. ON Semiconductor shares do look undervalued and I
do like the company’s long-term position in markets like auto and
industrial and parts of communications and computing, but the risk of
near-term turbulence is something to consider if you’re the type of
investor who hates short-term pain in the pursuit of long-term gain.
Click here for more:
Lead Times Are A Risk, But ON Semiconductor Seems Undervalued
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