Stock Analysis & Ideas

Five-Star Analyst Tora Svanberg is Betting Big on These Two Stocks

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The semiconductor industry has received a timely boost with the recent passing of the CHIPS Act. Taking this into account, we look at Stifel Nicolaus analyst Tora Svanberg’s top choices from the sector which can be prudent investment picks.

In our “Expert Spotlight” piece today, with the help of the TipRanks Expert Center, we will look at two picks of five-star analyst Tore Svanberg that he is bullish on. Svanberg is a Managing Director and Senior Analyst at Stifel Nicolaus with expertise in the Semiconductor industry. He is upbeat about a number of stocks, including Microchip Technology (NASDAQ: MCHP) and SiTime Corporation (NASDAQ: SITM).

Svanberg has been in the market for two decades now, with his notable previous employers being Piper Jaffray, Robertson Stephens, and Thomas Weisel Partners. Also, Svanberg has been recognized for his stock-picking abilities by The Wall Street Journal’s “Best on the Street” Analyst Survey.

Furthermore, Svanberg is a graduate of Franklin University, Switzerland, where he earned a BA degree in International Relations. Svanberg also possesses an MA in International Policy Studies from the Middlebury Institute of International Studies in Monterey, CA.

Svanberg’s Standing Among TipRanks Experts

According to the TipRanks Star Ranking System, Tore Svanberg ranks # 24 out of 8,045 analysts in the TipRanks universe and # 37 out of 21,519 overall experts, including hedge fund managers, Wall Street analysts, corporate insiders, financial bloggers, and individual investors.

Svanberg’s success rate in picking stocks stands at 69%, whereas his average return per rating is an impressive 23.80%.

The analyst’s average returns relative to the S&P 500 and the benchmark sector stand at 12.40% and 6.30%, respectively.

Additionally, among his 657 ratings, 76.56% are Buys, 19.79% have a Hold rating, and 3.65% have a Sell rating.

Notably, according to TipRanks, Svenberg’s most profitable pick has been Sitime Corporation between January 15, 2020, and January 15, 2021, generating an impressive return of 433.20%. Interestingly, Sitime continues to remain a top pick for Svanberg.

Now, let’s have a deeper look at his two top picks.

Svanberg is Confident About Microchip Technology

Established in 1989, Microchip Technology manufactures microcontroller, mixed-signal, analog, and Flash-IP integrated circuits. The company’s products include microcontrollers, embedded security devices, and radio frequency devices, among others. Presently, the company commands a market cap of $40.72 billion.

In its latest results for the first quarter, the company posted strong numbers. Revenues for the quarter came in at $1.96 billion, up 25.1% from the previous year. Earnings per share (EPS) stood at $1.37 for the quarter, which denotes a growth of 38.4% from the previous year. Both metrics surpassed the Street estimates.

Microchip Technology is slated to report its third-quarter results on November 3, 2022.

Svanberg retains his optimism about the stock. The analyst reiterated a Buy rating and raised the price target to $77 from $75, which implies an upside potential of 3.7% from current levels.

Meanwhile, the analyst enjoys a success rate of 75% and an average profit of 13.60% on the stock.

Is Microchip Technology a Good Stock to Buy?

Overall, the consensus among analysts for Microchip Technology stock is a Moderate Buy based on 10 Buys and four Holds. The MCHP average price target of $84.21 implies an upside potential of 13.4% from current levels. Shares have gained marginally over the past year.

Svanberg Remains Optimistic About SiTime Corporation

Founded in 2005, SiTime is a fabless chipmaker that develops micro-electromechanical systems (MEMS), used for timing devices in electronics. The company currently commands a market cap of $2.89 billion.

The company reported impressive results for the second quarter, with both revenue and earnings surpassing estimates. Revenues for the quarter came in at $79.4 million, which denotes a growth of 78.5% from the year-ago quarter. EPS also witnessed an impressive growth of 141.3% from the previous year to $1.11.

The company is expected to report its third-quarter results on November 2, 2022.

Svanberg continues to remain confident about the stock. Svanberg reiterated a Buy rating on the stock with a price target of $220, which implies an upside potential of 64.2% from current levels.

Meanwhile, the analyst enjoys a success rate of 59% and an average profit of 93.48% on the stock.

Is SiTime a Good Buy?

Overall, the consensus among analysts for SiTime stock is a Strong Buy based on four unanimous Buys. The SITM average price target of $216.25 implies an upside potential of 61.4% from current levels. Shares have declined 33.4% over the past year.

Svanberg’s Picks are Expected to Benefit from the CHIPS Act

With the recent ratification of the $280 billion CHIPS and Science Act by President Biden, companies like Power Integrations and SiTime are expected to benefit from tax breaks and subsidies.

Additionally, the companies’ strong fundamentals, promising future growth potential, and Svanberg’s excellent stock-picking skills make these companies attractive investment options.

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