Inphi Corporation (IPHI) is one of our top favorites in the semiconductor space.
The company has a market cap of around $1B, is debt free, has approx. $100M in cash while it has made ‘only’ $7M loss in 2015. Forward P/E is 22x and the P/S ratio is 4.5x. All very healthy figures.
Moreover, the company has not emitted (almost) any new shares in the last 12 months.
Chart-wise, IPHI is testing an extremely important price point right here right now. The $27.50 level was the peak in 2011 andthe peak in the first 6 months of 2015, as evidenced by the purple support line on the weekly chart. Note how the 90 week moving average is yet another time an excellent indicator for the long term trend.
Moreover, on the daily chart, the $27 area is coinciding with the ascending trendline.
So today’s price at $27.50 has a huge importance: it is the peak of 2011, the peak of the first half of 2015, and the support line of the rising trend channel.
Given the healthy valuation of the company, a great oulook, rising interest of investors (as evidenced by rising volume on higher prices, see second chart), we can only conclude that THIS is an excellent entry point. Provided that the $26 to $27 area will hold, we believe that IPHI is a BUY.
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