Should you sell TriQuint Semiconductor (Nasdaq: TQNT) today?

The decision to sell a stock you've researched and followed for months or years is never easy. If you fall in love with your stock holdings, you risk becoming vulnerable to confirmation bias -- listening only to information that supports your theories, and rejecting any contradictions.

In 2004, longtime Fool Bill Mann called confirmation bias one of the most dangerous components of investing. This warning has helped my own personal investing throughout the Great Recession. Now, I want to help you identify potential sell signs on popular stocks within our 4-million-strong community.

Today I'm laser-focused on TriQuint Semiconductor, ready to evaluate its price, valuation, margins, and liquidity. Let's get started!

Don't sell on price
Over the past 12 months, TriQuint Semiconductor has risen 11% versus an S&P 500 return of 11.3%. Investors in TriQuint Semiconductor are likely satisfied with their market-matching returns, but is now the time to cut and run? Not necessarily. Short-term price changes alone are not sell signs. The market may be missing the critical element of your TriQuint Semiconductor investing thesis. For historical context, let's compare TriQuint Semiconductor's recent price to its 52-week and five-year highs. I've also included a few other businesses in the same or related industries:


Recent Price

52-Week High

5-Year High

TriQuint Semiconductor $9.51 $9.85 $9.85
Anadigics (Nasdaq: ANAD) $5.98 $6.25 $19.50
RF Micro Devices (Nasdaq: RFMD) $6.58 $6.94 $9.58
Skyworks Solutions (Nasdaq: SWKS) $21.82 $21.98 $22.00

Source: Capital IQ, a division of Standard & Poor's.

TriQuint Semiconductor is basically at its 52-week high. This means we need to dig into the valuation to ensure that these previously untested highs are justified.

Potential sell signs
First, let's look at the gross margins trend, which represents the amount of profit a company makes for each $1 in sales, after deducting all costs directly related to that sale. A deteriorating gross margin over time can indicate that competition has forced the company to lower prices, that it can't control costs, or that its whole industry's facing tough times. Here is TriQuint Semiconductor's gross margin over the past five years:

Source: Capital IQ, a division of Standard & Poor's.

TriQuint Semiconductor is having no trouble maintaining its gross margin, which tends to dictate a company's overall profitability. This is solid news; however, TriQuint Semiconductor investors need to keep an eye on this over the coming quarters. If margins begin to dip, you'll want to know why.

Next, let's explore what other investors think about TriQuint Semiconductor. We love the contrarian view here at, but we don't mind cheating off of our neighbors every once in a while. For this, we'll examine two metrics: Motley Fool CAPS ratings and short interest. The former tells us how's 170,000-strong community of individual analysts rate the stock. The latter shows what proportion of investors are betting that the stock will fall. I'm including other peer companies once again for context.


CAPS Rating (out of 5)

Short Interest (% of Float)

TriQuint Semiconductor 4 7.0
Anadigics 4 5.6
RF Micro Devices 4 6.9
Skyworks Solutions 4 11.9

Source: Capital IQ, a division of Standard & Poor's.

The Fool community is rather bullish on TriQuint Semiconductor. We typically like to see our stocks rated at four or five stars. Anything below that is a less-than-bullish indicator. I highly recommend you visit TriQuint Semiconductor's stock pitch page to see the verbatim reasons behind the ratings.

Here, short interest is at a high 7%. This typically indicates that large institutional investors are betting against the stock.

Now, let's study TriQuint Semiconductor's debt situation, with a little help from the debt-to-equity ratio. This metric tells us how much debt the company's taken on, relative to its overall capital structure.

Source: Capital IQ, a division of Standard & Poor's.

TriQuint Semiconductor has done a good job of wiping out its debt. This renders the debt-to-equity ratio useless, but I have included this section for historical context.

The last metric I like to look at is the current ratio, which lets investors judge a company's short-term liquidity. If TriQuint Semiconductor had to convert its current assets to cash in one year, how many times over could the company cover its liabilities? As of the last filing, TriQuint Semiconductor has a current ratio of 3.95. This is a healthy sign. I like to see companies with current ratios greater than 1.5.

Finally, it's highly beneficial to determine whether TriQuint Semiconductor belongs in your portfolio -- and to know how many similar businesses already occupy your stable of investments. If you haven't already, be sure to put your tickers into's free portfolio tracker, My Watchlist. You can get started right away by clicking here to add TriQuint Semiconductor.

The final recap

TriQuint Semiconductor has failed 1 of the quick tests that would make it a sell. This is great, but does it mean you should hold your TriQuint Semiconductor shares? Not necessarily. Just keep your eye on these trends over the coming quarters.

Remember to add TriQuint Semiconductor to My Watchlist  to help you keep track of all our coverage of the company on

If you haven't had a chance yet, but sure to read this article detailing how I missed out on over $100,000 in gains through wrong-headed selling.

Jeremy Phillips does not own shares of the companies mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.The Motley Fool has a disclosure policy.