RF Micro Devices: How To Play The Growing Telecom Market Of China

We recommend investors to take a long position in RF Micro Devices (RFMD) as the company has significant growth potential due to its presence in the growing telecom market of China. Rising smartphone penetration and upgrades to the faster 3G and 4G technology by the telecom carriers should work in the favor of RFMD by increasing demand for its products and services. The stock is trading at cheap valuations and the current price of $4.45 could prove to be a good entry point for investors to take advantage of its future growth.

RFMD is trading at 1.5 times its sales, which is a discount of 36% and 49% over the multiples of its rivals Broadcom Corp. (BRCM) and Skyworks Solutions Inc. (SWKS), respectively. The stock is down 16% since the start of the year and is currently down 40% from its 52 week highs. Read more