By Philip van Doorn
SOXX is the largest, with $8.9 billion in total assets, and is cap-weighted, as described above. It holds the 30 largest U.S.-listed companies in the industry, including American depositary receipts (ADRs) of foreign companies, such as Taiwan Semiconductor Manufacturing Co. /zigman2/quotes/204359850/composite TSM -3.04% , which are capped at 10% of the portfolio. Its annual expenses are 0.43% of assets under management.
The VanEck Semiconductor ETF /zigman2/quotes/200571902/composite SMH -2.64% has $6.9 billion in assets, with a cap-weighted portfolio of 25 stocks, selected though a scoring methodology that includes market cap and trading volume. It is even more concentrated than SOXX, with its top five holdings making up 44.4% of the portfolio, but its different weighting scheme means Taiwan Semiconductor is the top holding, at 14.5%. Its expense ratio is 0.35%.
The SPDR S&P Semiconductor ETF /zigman2/quotes/204438110/composite XSD -3.19% has $1.4 billion in assets, with a modified equal weighting of 40 stocks that “tilts its portfolio away from large, well-known companies and toward smaller growth ones,” according to FactSet. Its expense ratio is 0.35%.
The Invesco Dynamic Semiconductors ETF /zigman2/quotes/209181828/composite PSI -2.94% also leans toward smaller companies, with a modified equal-weighted $860 million portfolio of 30 stocks, reconstituted quarterly. Its expense ratio is 0.56%.
The First Trust Nasdaq Semiconductor ETF /zigman2/quotes/200283893/composite FTXL -2.29% has $95 million in assets and holds 30 of the most liquid semiconductor stocks listed in the U.S., “weighted according to factors related to value, volatility and growth,” according to FactSet. Its largest holding is Synaptics Inc. /zigman2/quotes/208827271/composite SYNA -3.80% , which makes up 8.3% of the portfolio. Its expense ratio is 0.60%.
Together, removing duplicates, the five ETFs hold 65 stocks, with 62 covered by at least five analysts covered by FactSet.
Among the 62 companies, 25 have “buy” or equivalent ratings among at least 75% of the analysts. Only 10 of them are held by SOXX and only three (including Nvidia) are held by all five ETFs. Here they are, ranked by the implied 12-month upside, based on consensus price targets:
|Company||Share “buy” ratings||Closing price – Nov. 8||Consensus price target||Implied 12-month upside potential||Forward P/E||Held by|
|Kulicke & Soffa Industries Inc. /zigman2/quotes/200795669/composite KLIC||80%||$58.15||$83.00||43%||8.8||PSI|
|MKS Instruments Inc. /zigman2/quotes/208573663/composite MKSI||82%||$158.84||$213.20||34%||13.3||SOXX, PSI|
|Cirrus Logic Inc. /zigman2/quotes/208789077/composite CRUS||77%||$79.61||$106.36||34%||14.3||XSD, FTXL|
|Micron Technology Inc. /zigman2/quotes/205710729/composite MU||77%||$74.56||$95.33||28%||8.7||SOXX, SMH, XSD, FTXL|
|Taiwan Semiconductor Manufacturing Co. ADR /zigman2/quotes/204359850/composite TSM||90%||$120.91||$153.01||27%||26.0||SOXX, SMH|
|Smart Global Holdings Inc. /zigman2/quotes/208088387/composite SGH||100%||$58.24||$72.00||24%||9.1||XSD|
|United Microelectronics Corp. ADR /zigman2/quotes/207234499/composite UMC||81%||$11.18||$13.82||24%||12.4||SOXX|
|Ultra Clean Holdings Inc. /zigman2/quotes/208969279/composite UCTT||100%||$59.21||$72.58||23%||12.6||PSI|
|Allegro MicroSystems Inc. /zigman2/quotes/222187551/composite ALGM||100%||$32.68||$40.00||22%||39.4||XSD, PSI|
|Onto Innovation Inc. /zigman2/quotes/208003296/composite ONTO||100%||$90.50||$105.00||16%||20.1||PSI|
|SiTime Corp. /zigman2/quotes/215091577/composite SITM||100%||$291.34||$328.20||13%||79.4||XSD|
|Axcelis Technologies Inc. /zigman2/quotes/208663939/composite ACLS||100%||$61.85||$68.50||11%||17.5||PSI|
|ASML Holding N.V. ADR /zigman2/quotes/210293876/composite ASML||77%||$849.93||$935.00||10%||44.6||SOXX, SMH|
|Diodes Inc. /zigman2/quotes/208712887/composite DIOD||75%||$107.73||$117.67||9%||19.0||XSD, PSI|
|Teradyne Inc. /zigman2/quotes/208321188/composite TER||84%||$143.89||$153.24||6%||22.8||SOXX, SMH, FTXL|
|Camtek Ltd. /zigman2/quotes/204635933/composite CAMT||100%||$44.25||$46.60||5%||26.3||PSI|
|Analog Devices Inc. /zigman2/quotes/201631938/composite ADI||79%||$184.46||$193.71||5%||26.0||SOXX, SMH, XSD, PSI, FTXL|
|Nova Ltd. /zigman2/quotes/207610267/composite NVMI||100%||$128.77||$135.00||5%||30.3||PSI|
|Marvell Technology Inc. /zigman2/quotes/200053236/composite MRVL||80%||$73.00||$75.12||3%||43.2||SOXX SMH, XSD, FTXL|
|Broadcom Inc. /zigman2/quotes/200646538/composite AVGO||84%||$558.95||$567.26||1%||18.3||SOXX, SMH, XSD, PSI, FTXL|
|Synopsys Inc. /zigman2/quotes/208349984/composite SNPS||88%||$342.91||$341.14||-1%||46.8||SMH|
|Semtech Corp. /zigman2/quotes/206723451/composite SMTC||91%||$90.52||$88.30||-2%||32.4||XSD|
|MaxLinear Inc. /zigman2/quotes/200823803/composite MXL||75%||$68.32||$66.60||-3%||21.4||XSD, PSI|
|Impinj Inc. /zigman2/quotes/209227955/composite PI||100%||$76.04||$73.57||-3%||991.4||XSD|
|Nvidia Corp. /zigman2/quotes/200467500/composite NVDA||81%||$308.04||$243.44||-21%||71.6||SOXX, SMH, XSD, PSI, FTXL|
A screen can only be the beginning of your research, if you wish to hold individual stocks rather than make broad investments using ETFs or mutual funds. Click on the tickers for more about each company. Click here for Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote page.
As you can see on the table, some of the stocks, despite being so well-regarded, have gotten ahead of their one-year price targets. Nvidia is a good example. Why do so many analysts rate it a buy, despite believing the stock is overheated? Because they are looking at years beyond a 12-month target.