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Halftime: Street Recklessly Selling Chip Stocks?
CNBC.com | March 07, 2011 | 01:28 PM EST

The S&P fell Monday, not only weighed down by worries about higher oil but investors were also spooked by a downgrade that triggered a sell-off in the tech sector.

Specifically, Wells Fargo downgraded chip stocks broadly, suggesting many of these names had gotten ahead of themselves.

The semiconductor index is up 45 percent since the start of September, roughly when the market's recent rally began, while the broad S&P 500 rose about 25 percent in that period.

However the Fast Money traders spoke with the Wells analyst who made the downgrade, and they think investors may be throwing out the baby with the bath water.

What’s the Street missing?In a live interview analyst David Wong explains that although the downgrade was from 'Overweight' to 'Market Weight' he’s not bearish by any stretch. “I do think great opportunities remain in the chip sector,” he says. "I think excellent investments remain to be made in the space."The key he says is to pick and choose. That's what he intended to communicate. “My downgrade signals a need to be more selective,” he says.And that leads to the obvious questions. Which stocks are currently attractive?

Wong suggests six names belong on the radar. Xilinx and Altera are two stocks that he still rates as outperform. “They’re very highly profitable companies,” he says. He also likes Analog Devices and Linear Tech.

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