ON Semiconductor Corporation (ON) Clearly Signals Buy-Into the Stock: Don’t ignore the signals

ON Semiconductor Corporation (NASDAQ: ON) stock jumped 0.35% on Wednesday to $74.00 against a previous-day closing price of $73.74. With 4.3 million shares changed hands, the volume of the stock remained lighter than its average volume of 7.2 million shares. During the session, the Semiconductors company that operates in wider Technology sector, reached to the highest price of $76.05 whereas the lowest price it dropped to was $73.48. The 52-week range on ON shows that it touched its highest point at $77.28 and its lowest point at $44.76 during that stretch. It currently has a 1-year price target of $73.51. Beta for the stock currently stands at 1.70.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ON was up-trending over the past week, with a rise of 5.28%, but this was up by 11.13% over a month. Three-month performance dropped to -3.53% while six-month performance rose 31.58%. The stock gained 20.25% in the past year, while it has gained 8.95% so far this year. A look at the trailing 12-month EPS for ON yields 3.85 with Next year EPS estimates of 4.53. For the next quarter, that number is 1.26. This implies an EPS growth rate of 306.80% for this year and -14.12% for next year. EPS is expected to grow by 19.20% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 39.30%.

Float and Shares Shorts:

At present, 432.90 million ON shares are outstanding with a float of 430.73 million shares on hand for trading. On Oct 13, 2022, short shares totaled 20.74 million, which was 4.79% higher than short shares on Sep 14, 2022. In addition to Mr. Hassane S. El-Khoury as the firm’s Pres, CEO & Director, Mr. Thad Trent serves as its Exec. VP, CFO & Treasurer.


Institutional Ownership:

Through their ownership of 101.19% of ON’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 66.75% of ON, in contrast to 34.63% held by mutual funds. Shares owned by individuals account for 2.34%. As the largest shareholder in ON with 11.11% of the stake, The Vanguard Group, Inc. holds 48,141,197 shares worth 48,141,197. A second-largest stockholder of ON, Fidelity Management & Research Co, holds 43,966,334 shares, controlling over 10.15% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in ON, holding 26,605,681 shares or 6.14% stake. With a 3.00% stake in ON, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 13,004,734 shares are owned by the mutual fund manager. The Janus Henderson Enterprise Fund, which owns about 2.34% of ON stock, is the second-largest Mutual Fund holder. It holds 10,126,024 shares valued at 622.04 million. Vanguard Mid Cap Index Fund holds 2.34% of the stake in ON, owning 10,119,908 shares worth 621.67 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ON since 30 analysts follow the stock currently. There are 19 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 8 believe that the stock is worth HOLDING, 3 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ON analysts setting a high price target of $83.00 and a low target of $55.00, the average target price over the next 12 months is $73.73. Based on these targets, ON could surge 12.16% to reach the target high and fall by -25.68% to reach the target low. Reaching the average price target will result in a decline of -0.36% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ON will report FY 2022 earnings on 02/06/2023. Analysts have provided yearly estimates in a range of $5.31 being high and $5.18 being low. For ON, this leads to a yearly average estimate of $5.26. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. ON Semiconductor Corporation surprised analysts by $0.14 when it reported $1.45 EPS against a consensus estimate of $1.31. The surprise factor in the prior quarter was $0.08. Based on analyst estimates, the high estimate for the next quarter is $1.33 and the low estimate is $1.18. The average estimate for the next quarter is thus $1.26.

Summary of Insider Activity:

Insiders traded ON stock several times over the past three months with 0 Buys and 5 Sells. In these transactions, 0 shares were bought while 8,088 shares were sold. The number of buy transactions has increased to 30 while that of sell transactions has risen to 52 over the past year. The total number of shares bought during that period was 589,213 while 353,990 shares were sold.

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