4-Star Stocks Poised to Pop: Tower Semiconductor

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, chip maker Tower Semiconductor (Nasdaq: TSEM  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Tower Semi's business and see what CAPS investors are saying about the stock right now.

Tower Semi facts

Headquarters (Founded)	Migdal Haemek, Israel (1993)
Market Cap	$352.5 million
Industry	Semiconductors
Management	CEO Russell Ellwanger (since 2005) CFO Oren Shirazi (since 2004)
Return on Capital (Average, Past 3 Years)	(5%)
Cash/Debt	$198.38 million / $482.37 million
Competitors	IBM (NYSE: IBM  ) Taiwan Semiconductor (NYSE: TSM  ) United Microelectronics (NYSE: UMC  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 97% of the 116 members who have rated Tower Semi believe the stock will outperform the S&P 500 going forward. These bulls include phathugo2467 and fellow Fool Anders Bylund (TMFZahrim), who is ranked in the top 5% of our community.

In late January, phathugo2467 tapped Tower Semi as solid way to go for growth: "Banking on increased demand in the tech sector, anticipated growth, good numbers."

Currently, Tower Semi even sports a particularly paltry forward P/E of 2.2. That represents a huge discount to listed rivals IBM (11.3), Taiwan Semi (10.3), and United Micro (54.6).

Anders elaborates on the bargain opportunity:

So the question remains, is Tower a value-priced and vendor-neutral way to play the analog chip wars between major customers RF Micro Devices, Skyworks Solutions, and Cypress Semiconductor -- or is it a risky house of cards ready to topple in a light breeze?

I'm going with the deep-value proposition, given that analog chip demand should remain strong long enough to let Tower rebuild its balance sheet for real.

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