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ECAPRADAR ; Marketwatch [Birmingham Post (England)](Birmingham Post (England) Via Acquire Media NewsEdge) UK tech firm IQE specialises in some of the tech sector's smallest components, but at its current valuation could well present and big trading opportunity for the more adventurous investor. The firm uses crystal growth technology, in order to manufacture semiconductor wafers for use in micro chips along with a variety of laser based products. In the firm's latest trading update, management announced an impressive set of figures, highlighting an impressive 43 per cent increase in profits, however in a seemingly strange move investors sold the sold off the stock by some 15 per cent over the next few weeks. The reason for the drop can likely be attributed to a number of issues, first and foremost a slightly cautious 2014 forecast. It was not just IQE that posted 'disappointing' results, two of IQE's staple clients RFMD and Triquint also posted weaker than expected 2014 guidance, news that more than likely added to the downward pressure. Finally wireless technology specialist Qualcom has made a recent move into the semiconductor space and therefore into direct competition with IQE, naturally the news was not embraced by investors. This leaves IQE at interesting valuation and given that the firm trades at just six times forecasted earnings and boasts a strong balance sheet that features a very manageable amount of debt, we feel that the next move will be to the upside. With shares at the bottom end of the range (around 23p) and full year results due to be released on March 26, we rate IQE as a speculative 'buy'. (c) 2014 ProQuest Information and Learning Company; All Rights Reserved. |