Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Freescale Semiconductor (NYSE: FSL ) saw some love from Wall Street this morning after Goldman Sachs analysts upgraded the stock from neutral to buy. Freescale was up over 11% immediately following the upgrade, but has given up a sliver of those gains in subsequent trading.
So what: This jump comes only a few weeks after Freescale plunged for far more substantial reasons -- lousy guidance. Goldman upgraded a basket of chip makers in addition to Freescale, with Applied Materials (Nasdaq: AMAT ) and LSI (NYSE: LSI ) both gaining about 5% today on Goldman upgrades. Freescale's extra-large pop relative to these peers is a bit odd, considering that it's the only unprofitable one of the trio, and pales in comparison to Applied Materials' much better metrics (including a nice dividend yield, to boot).
Now what: Goldman now projects significant upside in the stocks it's upgraded, but Freescale's got a long way to go to be considered attractively valued relative to its profitable peers. It's been some time since Freescale posted a net profit, but it's inched ever so close in recent quarters. Goldman might be right, but since Freescale's latest guidance actually calls for a decrease in gross margins, that prediction may take a few quarters to pan out.
Want more news and updates? Add Freescale to your Watchlist now.