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Building Up a Semiconductor Holding

This name is trading down today on lower-than-expected guidance so we are taking this opportunity to buy more shares.
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-- Buying 200 shares of TriQuint Semiconductor (TQNT) .

Model portfolio holding TriQuint Semiconductor (TQNT) is trading 15% lower today, with the stock currently changing hands around $7.02, and we will buy 200 shares after you receive this Alert. This purchase gives us a total of 1,000 shares of the company, which account for 3.9% of the model portfolio.

TriQuint exceeded third-quarter expectations overnight, but the company's fourth-quarter guidance trailed expectations. As mispriced as the stock may have been at $8.98 less than 48 hours ago, we believe that TriQuint is undervalued at current levels. The company is gaining market share at Apple (AAPL) , maintains a pristine balance sheet and is valued at just 13x expected 2014 earnings.

TriQuint earned $0.16 a share in the quarter, which was $0.06 ahead of the consensus analyst estimate. Revenue grew 25% year-over-year to $250.8 million and also exceeded expectations. Mobile devices revenue led the growth and gross margin improved 670 basis points sequentially.

Looking ahead to the fourth quarter, the company expects to earn $0.12 to $0.14 a share, on $260 million to $270 million of revenue. Management said that it has already booked 88% of the expected sales for the quarter and we believe the guidance will ultimately prove conservative.

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