Trade Alert: Taking profits on EZ Chip and update on Synaptics
Don’t forget this week’s Live Q&A Chat at 2pm ET on the Trading With Cody app or at http://twc.scutify.com/members. I’ll be doing this week’s Live Chat session from the road as we’re taking my daughter Amaris to Albuquerque in our RV so that we’ll be there for her first doctor’s appointment since we got to get back to Lincoln County and closer to home a few weeks ago. It’s not like we can just jump in a car and run up there tomorrow morning for the appointment.
We’ve got two chip stocks up 15% plus this morning.
We’ve been building up our EZChip EZCH for the last few weeks, having just initiated the position on August 18 though I’ve done some tranching since then, most recently adding to EZCH when it was below $20 during that -1000 morning on the $DJIA that I talked about in yesterday’s Cody Underground Podcast (subscribe to my podcast on iTunes here).
Well, EZCH is up 15% today on news that it is being bought by Mellanox another Isreal-based semiconductor company. The average chip stock is down at least 50% from their highs this summer but we happen to own one of the few chip stocks that is up nicely over the same time frame. It’s even at new 52-week highs here on this news this morning. It’s probably the only semi stock that’s at a 52-week high today!
With 25% gains or so in the position after just five weeks of owning it and with the company no longer as much of a pureplay on the Internet of Things, (Mellanox is more of a networking center and cloud stock), I’ll be taking our profits on this name over the next week to free up that cash and moving on from it.
I don’t buy a stock in hopes that it gets acquired, but you have heard me talking recently about the potential for more consolidation in the semiconductor industry recently too. And in the rather ugly market out there lately, well, we’ll take it.
Meanwhile, the other headline spiking one of stocks is “Synaptics Said to Reject $110-a-Share Bid From Chinese Investor“. I’m holding Synaptics SYNA steady even as the stock is up 15% today.
Sandisk SNDK, a heavily shorted chip name is also up 8% today off all this semiconductor consolidation news.
Stock markets themselves are up a little bit today and we’ve got some nice green in the portfolio but we’ve all seen how fleeting that has been lately. Steady as she goes otherwise, folks. Let’s stock to the playbook.
Be sure to check out yesterday’s Cody Underground Podcast (subscribe to my podcast on iTunes here). And join me for this week’s Live Q&A Chat 2pm ET. Be there or be square.
