Predicting the Biggest Tech Earnings Winners: STEC, Amtech, Towerstream and More (STEC, EMC, ASYS, TWER, DIOD, IDTI)

Earnings season is well underway in the tech sector. What should investors expect from these reports? What are the key storylines to follow and are these stocks likely to trade higher or lower in the wake of their results?

In NextInning.com’s earnings previews, available free to trial subscribers, key storylines are evaluated, analyst expectations are audited, and in depth valuation analyses are provided to develop fair value ranges for dozens of stocks, allowing investors to determine which stocks to favor and which to avoid ahead of earnings reports.

Some of the stocks covered include:

STEC Inc. (STEC) – “When demand for NAND Flash chips dropped off the table nine months earlier, STEC was positioned to leverage the decline to its benefit. With commitments from its largest customer, EMC (EMC), in house, STEC negotiated very favorable prices for the NAND Flash chips that constitute the vast majority of the unloaded cost for STEC’s bill of material. As the cost of NAND Flash increased, STEC leveraged this advantage to report remarkably strong gross profit margins.” Are these margins proving to be sustainable?

Amtech Systems (ASYS) – “When Paul suggested buying Amtech in 2008 when it was trading for only $2.48, few investors had ever heard of the stock. As it turned out, Wall Street caught on to the Amtech story, and as is all too often the case, bid the price up to what was at the time an unsustainable high. On February 7, 2011, the price of Amtech was a remarkable $28.61 – well more than ten times the 2008 entry price.” Is Amtech poised to return to its February highs?

Towerstream (TWER) – “The story for Towerstream remains much as it was a quarter ago; there is a reasonably solid incremental growth factor that Paul thinks will continue to play out favorably, and two potential growth turbochargers that could come into play going forward.” How might Towerstream be poised to work with mobile telecom heavyweights?

Diodes (DIOD) – “The best opportunities investors have to make out-sized returns are when we can spot Wall Street’s mistakes. What’s interesting here is that when these mistakes lead to low prices, the risks of betting against them are reduced. Such was the case for Diodes in December 2008.” What sort of opportunity is Diodes offering investors right now?

Integrated Device Tech (IDTI) – “the two primary risk factors to consider with IDT are its increased investment in R&D and its entry into the white-hot, but highly competitive, touch screen market. IDT entered into the touch screen market with what it calls PureTouch. According to IDT, this is a single layer touch screen technology, which would imply at least moderately lower costs for LCD screens, which would be welcomed by handheld device manufacturers always looking to shave money from the bill of materials.” Do touchscreens mean big future growth for IDT?

In its earnings previews for the week of May 9th, NextInning.com looks at several popular tech stocks set to report earnings, including Amtech, STEC, Towerstream, Diodes, IDT and more.

Tags: ASYS, DIOD, EMC, IDTI, STEC, TWER