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: Diodes Inc.
So what: Morgan Keegan raised its price target on the stock from $28 to $31.50. Another brokerage firm, Robert W. Baird, upgraded the stock from neutral to outperform.
Now what: Sales growth has accelerated and the company has cut costs, providing opportunity for continued strong EPS growth. The EPS beat and management's comments about capacity constraints and "strong momentum as we enter 2011" suggest that EPS estimates are too low. At the time of publication, Diodes was trading at $28.85; the stock is attractively valued at a forward P/E ratio of 13.9, a discount to the semiconductor sector (at 24.5) and the technology sector (at 19.9).
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Fool contributor Cindy Johnson does not own shares of any company named above. 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.