Since peaking at nearly $14 in November – December, 2017, shares of Himax Technologies (NASDAQ: HIMX) finally bottomed in April at around $6 a share. Optimism over its 3D sensing partnership with Qualcomm (NASDAQ: QCOM), along with Broadcom’s (NASDAQ: AVGO) ambition to buy out Qualcomm, drove HIMX stock higher. What should investors make of the 10% rally in HIMX stock last week?
Analyst Upgrades
Himax earned a $12 price target from Robert W. Baird’s Tristan Gerra. This analyst has a 5-star rating on tipranks, or 178th place out of 4,815 analysts. His one-year average return is 20.6% and he is right 69% of the time. Yet not all analysts are on board Himax’s growth potential in WLO and 3D sensing parts. The company admitted on its conference call that high-end Android smartphone makers need extra support implementing Himax’s solution. The fragmentation in the Android market also adds more support requirements from Himax.
The three conferences Himax will join in June is also giving the stock a boost. Since April, shares traded above the 20- and 50-day moving average but is still below the $9.00 200-day SMA (simple moving average). Shorts are still plentiful: 16% of the shares are sold short.
Takeaway
HIMX is debt free and an attractive long-term growth play. It is still tiny in comparison to tech stocks ($1.4 billion compared to $87 billion with Qualcomm or $39 billion with NXPI).
