CEVA: Zacks’ Bull of the Day Play

Sometimes to make money you’ve got to roll the dice a little bit. Following the crowd may work in certain markets and under the circumstances, but looking away from the beaten path could provide you with other worldly rewards. Getting in on the ground floor of a major market trend could turn you into a big time player. As long as you have the gusto to put your money where your mouth is.

There’s no question that the big players in the cell phone market here in the US are Apple and Samsung. Just ask people you work with or in your family what phone they have. You’re going to see a whole lot of iPhones and Galaxy S’s. Of course, these are the high end phones that everyone may want but not everyone wants to pay for. Lately there’s been an emergence in the second-tier Android phone market. These phones offer similar performance at a much cheaper price. Think Intel (INTCAnalyst Reportand AMD (AMDAnalyst Report) in the computer market.

Click “FOLLOW THE AUTHOR” above for free stock picks!!! And Twitter @bartosiastics

Today’s Bull of the Day provides chips for this second-tier Android market. CEVA (CEVASnapshot Report) is a Zacks Rank #1 (Strong Buy) that’s already preannounced Q3 earnings, expecting stronger-than-expected revenues and lower-than-expected operating expenses. CEVA was a major player in the 2G market, taking the majority of the market share in that business. It looks like the Android smartphone market is currently in a transition. Lower cost handsets with similar features are driving down phone costs across the board. That opens the window for a company like CEVA to jump in and grab market share here in the 4G market over the next several quarters.

Their 4G/LTE chips are being utilized by four different customers now. Already, production in this space is up 7% quarter over quarter and 19% year over year. The bullish attitude has analysts increasing their earnings estimates for the current quarter and current year. Our Zacks Consensus Estimate has increased from 6 cents to 11 cents for the current quarter and up from 16 cents to 28 cents for the current year.

Click “FOLLOW THE AUTHOR” above for free stock picks!!! And Twitter @bartosiastics

The stock has been on fire since the preannouncement in early October. With the stock trading down at $18, the preannouncement was enough to catapult shares all the way to a new 52-week high here near $24. Volumes have remained relatively average over the last several months. The 20-day moving average sits down at $21.82, further hammering home the current bullish trend.

David Bartosiak is the Momentum Stock Strategist with Zacks, editor of the Momentum Trader and Home Run Investor, and host of “Trending Stocks”

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