Four Noteworthy Analyst Calls: RF Micro Devices, Inc. (RFMD) and More

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An analyst’s call can be a major catalyst for movement in a stock. In the past I have written in detail about such subjects, as a call can often create a domino effect of revised outlooks and either buying or selling of a stock. In this piece I am looking at four stocks that traded with excessive volatility thanks to the notes issued by analysts; these are calls worth noting.

Company Ticker Firm Call
RF Micro Devices, Inc. (NASDAQ:RFMD) Raymond James Market Perform
VeriFone (NYSE:PAY) Piper Jaffray Neutral
Pioneer Southwest Energy (NYSE:PSE) UBS Sell
BHP  Billiton (NYSE:BHP) Citigroup Neutral

RF Micro Devices, Inc. (NASDAQ:RFMD)RF Micro Devices, Inc. (NASDAQ:RFMD)

Perhaps no analyst was harsher than Raymond James on Thursday, when the firm downgraded the entire industry of RF chipmakers, specifically RF Micro Device. The firm cited increased competition and weak margins as a contributor to its call, yet the firm is alone with such a low rating on the stock.

Strangely enough, this downgrade came as QUALCOMM, Inc. (NASDAQ:QCOM) introduced a new RF front-end solution featuring a 3D package. As a result, the analyst is correct, this is quickly becoming a congested space, and the stock might be due for a significant correction.

VeriFone Systems Inc (NYSE:PAY)

It was a busy day for analysts who cover VeriFone, as the stock led the market in losses with 42.8%. The large loss came as a result of very weak guidance and a warning for both a massive revenue and EPS miss for the current quarter.

Therefore, analysts could not downgrade the stock quickly enough. They are showing concern regarding the company’s exposure to Europe, lost revenue opportunities, and weak South American sales. I think SunTrust said it best: “We are simply at a loss to explain such a huge miss,” a miss that was of epic proportions.

As a result, I would not touch this stock, as it looks like this fundamental decline could be steep.

Pioneer Southwest Energy Partners L.P. (NYSE:PSE)

Pioneer Southwest fell by almost 4% on Thursday as UBS cut the stock from Neutral to Sell. The firm noted a number of reasons for the bearish outlook, including: long-lived slow-decline assets, an oil-directed drilling program, and balanced commodity exposure.

The firm brings about very valid concerns, yet investors must remember to stay balanced and also weigh the positives. This is a company that is seeing unit gains of 11% in 2013, returns a yield over 8%, and is quite cheap with a P/E ratio at 8.0. Therefore, I think this downgrade might have presented opportunity for many investors.

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