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Two very different semiconductor stocks to hold for long-term gains

Two Very Different Semiconductor Stocks To Hold For Long Term Gains paper is one from these Finance, Forex lists, published during our reporter Erick Emerson just as February 4, 2019, these chapter can search by that tags Gains, Hold, longterm, Semiconductor, Stocks. We are glad to happy you along with providing that anothers blogpost from finance as well as I always writting this paper routine.

Semiconductor stocks can be frightening over short periods — they are volatile — even though the industry group outperforms over longer periods.

Gerry Frigon, the chief investment officer at Taylor Frigon Capital Management, said two chip makers, one very large and one a micro-cap, that he believes can triple in value over the next several years.

Taylor Frigon Capital Management is based in San Luis Obispo, Calif., and has about $200 million in assets under management, mainly for private clients. For the firm’s Core Growth Strategy, Frigon focuses on technology stocks — typically small and mid-cap companies, but also large-caps if he sees tremendous growth potential.

Before founding the firm in 2006, Frigon managed portfolios for private clients and institutions at Merrill Lynch, where he worked for 21 years.

Big and small

In an interview, Frigon said the firm had been holding shares of Nvidia

NVDA, +3.85%

 for 13 years, but had “culled” its holdings when the stock was in the $200-plus range, as he wasn’t comfortable at that valuation. The shares dropped to as low as $124 on Dec. 26, so he has been “scaling back” into the stock.


Three-year price chart for Nvidia.

During the run-up for Nvidia’s stock, “everything was happening at the same time, and there was no reason to expect that to continue,” Frigon said.

Nvidia’s fiscal 2018 ended Jan. 31, and the company is expected to announce fiscal fourth-quarter results Feb. 14. The consensus among analysts polled by FactSet is for the company’s full-year revenue for fiscal 2018 to increase 22% from fiscal 2017. However, sales are expected to decline 3% for full-year fiscal 2019, before increasing 21% for full-year fiscal 2020.

With such ups and downs, you can expect alarming headlines. That ties into the “crisis industry” that Frigon believes “has captivated media, economics, politics and popular culture.”

An informed, long-term investor who believes Nvidia has the right strategy to compete over the next decade won’t fall prey to negative earnings-season headlines.

Read: Global chip sales rise to record $468.8 billion in 2018, top one trillion units for first time

Frigon believes in the company for a very long-term investment because of the potential of Nvidia’s new RTX chip.

“Developers can now start making games that are way more realistic,” he said.

Taylor Frigon Capital Management

Gerry Frigon, chief investment officer of Taylor Frigon Capital Management.

“The gamers are saying they don’t want to pay up for it,” Frigon said, and that relates to Nvidia’s warning on Jan. 28 that its holiday-season sales would be $500 million less than the company had forecast. The lower outlook sent the stock down 18% to $128 that day. It’s now trading at about $148.

Some developers may be waiting before placing orders for RTX chips until they are more confident that games based on the technology will be a success.

But Frigon thinks the naysayers on RTX are being “shortsighted.”

“If you had the kids who love ‘Fortnite’ [developed by Epic Games, which is 40% owned by Tencent Holdings

TCEHY, +0.81%

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