4 Chip Stocks Smart Money Is Buying
NEW YORK ( TheStreet) -- Executives at semiconductor companies have been talking about a "bottom" in the cycle, and smart investors have heeded the call, snatching up shares of various chip-makers during the fourth quarter.
Semiconductors, used in everything from computers to mobile phones to automobiles, are generally seen as a barometer for the economy. Stronger sales of semiconductors indicate a stronger economy.
Read on for four semiconductor stocks that smart investors were adding during the fourth quarter.
When Texas Instruments reported its fourth quarter results, CEO Rich Templeton said he believes that the company is at the bottom of the semiconductor cycle. TI reported earnings of 41 cents per share excluding items, on fourth quarter revenue of $3.42 billion. Wall Street analysts polled by Thomson Reuters expected earnings of 39 cents per share on $3.25 billion.
Major investors such as George Soros, Highbridge Capital, Paul Tudor Jones, Steve Cohen of SAC Capital and Citadel Advisers were adding or initiating stakes in Texas Instruments during the fourth quarter.
Particularly of note was Soros, who increased his position by 500,000 shares to 600,000. Highbridge, the hedge fund owned by J.P. Morgan, initiated a stake of 159,500 shares, while Tudor Investments started a stake with 144,100 shares.
Texas Instruments shares gained 9% during the fourth quarter, and are off to a strong start in 2012, up 15.8% year-to-date.
Intel is the biggest semiconductor company in the world, and investment managers such as Warren Buffett, D.E Shaw, and Goodman & Co. all added shares during the fourth quarter.
Warren Buffett initiated a stake in the Santa Clara, Calif-based chipmaker during the third quarter. Buffett had previously eschewed investments in technology, but Intel enjoyed its most profitable year in 2011, which perhaps changed Buffett's mind. He added nearly 2.1 million shares during the quarter to bring his total investment to 11,495,000 shares.
Hedge fund D.E. Shaw, led by David Shaw, upped its stake by 1,113,046 shares to bring the funds total holdings to 4,284,699 shares. Goodman initiated a position during the quarter by buying 871,700 shares.
Intel shares gained 13.7% during the fourth quarter and are up 9.6% so far in 2012.
Broadcom saw inflows from quant funds as well as two of the world's largest hedge funds, as they bet on a rebound in shares of the chipmaker.
Unlike Texas Instruments and Intel, Broadcom is more closely associated with mobile chips, though not on the scale of Qualcomm(QCOM) . Both Broadcom and Texas Instruments make chips for the Apple(AAPL) iPhone.