Rambus Stock: Best Semiconductor Buy for Short-Term Capital Gain

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Investment thesis

This article will use Rambus Inc. (NASDAQ: RMBS) as an illustration of our continued search for the most likely identification of near-term capital gain prospects and their potential capital loss risks.

We employ behavioral analysis to identify prospects of gain and loss for individual securities within predictable time horizons of months, rather than the several years normally used previously in 20and-century ratings.

If you are new to this analysis, please temporarily explore this brief explanation.

Active investment in semiconductor stocks

Company description, growth prospects

Rambus Inc. provides semiconductor products in the United States, Taiwan, South Korea, Japan, Europe, Canada, Singapore, China and internationally. The company offers DDR memory interface chips, including DDR5, DDR4 and DDR3 memory interface chips to module manufacturers and OEMs; Silicon IP including interface and security IP solutions that move and protect data in advanced applications; and physical interface and digital controller IP to deliver industry-leading integrated memory and interconnect subsystems. It also provides a patent portfolio covering memory architecture, high-speed serial links and security products. The company markets its products and services through its direct sales force and distributors. Rambus Inc. was incorporated in 1990 and is headquartered in San Jose, California.

Source: Yahoo Finance

Rambus Stock Street analyst forecast

Yahoo finance

Semiconductors are the electronic magic that makes 21st elegant century life, serve human tasks in countless ways that take 20and the life of the century in “the old days” whose real existence the younger generations find difficult to imagine.

They make possible many of the activities driven by handheld “smart” phones that most people today accept as ordinary, and enable continuous advancements that offer life enhancement often hard to imagine, even by “technicians” among us.

The era of information technology continues to demand these activities with ever-expanding capabilities for technology capacity and public mobility demands, all provided by semiconductors, continuously expanding achievements at the solid state.

The investment result is that there is much more price movement activity for short-term capital gains and losses than can be gained from 20and“long-term trend growth and earnings” strategies of the last century. What is needed to seize opportunities and minimize losses is a demonstrated stock-by-stock outlook of the expected market price range today and in the near future. The type we find in the high-volume trading behavior of institutional investment organizations, operating alongside the continuous flow of market transactions for individual investors in smaller lots.

Thus, we have specific, honest and unbiased predictions of future price limits, both up and down, driven by self-serving competing interests of participants in open market trading.

These limits can help define potential investment reward and risk on an issue-by-issue basis that is directly comparable between alternatives, regardless of their underlying competitive or economic circumstances. These essential details were subsumed in the hedging negotiations.

Figure 1 uses these forecasts to draw risk-reward price comparisons between alternative investments in semiconductor stocks.

Semiconductor Stock Risk-Reward Comparisons

Figure 1

Forecasts driven by Rambus stock hedging

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(used with permission)

Each stock is positioned on this chart by its intersection of upside price change forecasts on the green horizontal scale and downside price exposures (on the red vertical scale) typical after past forecasts like this one. ‘today. Any issue above the dotted diagonal has more potential risk than reward at its current price.

An industry benchmark standard by SPY is at the location [20]. Notably, none of the marketing services stocks generally have less downside risk than SPY, but current market conditions have shifted this market average ETF to reflect a higher degree of caution than usual.

Compare alternative investments

Since price change risk is a dynamic and not a constant, these exposure relationships will change over time. It is these changes that provide new opportunities for active investment capital gains on a recurring, shorter-term basis. Besides downside price exposure, there may be other investment attributes that investors will want to consider. Figure 2 shows some of them.

Figure 2

Detailed Rambus Comparative Data

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(used with permission)

Column price range prediction limits [B] and [C] be defined by MM’s hedging actions to protect the firm’s capital which must be exposed to the risk of price changes from volume trade orders placed by large $”institutional” clients.

[E] measures the potential upside risks for the short MM positions created to fill these orders and rewards the potentials for the buy positions thus created. Past forecasts like this provide a history of relevant risk of lower prices for buyers. The most severe actually encountered are found in [F]during the periods of maintenance in the effort to reach [E] earnings. This is where buyers are most likely to accept losses.

[H] indicates what proportion of the [L] sample of similar past predictions made gains by causing the price to reach its [B] target or be above sound [D] cost of entry at the end of a maximum holding period limit of 3 months.

[I] gives the net gains-losses of those [L] experiences and [N] suggests how much [E] can be compared to [I].

Additionally, Reward~Risk trade-offs involve the use of [H] win odds with loss odds 100 – H as weights for N-conditioned [E] and for [F]for a combined yield score [Q]. The typical job retention period [J] on [Q] provides a symbol of merit [fom] ranking measure [R] useful in portfolio position preference. Figure 2 is ranked on R among candidate securities, with RMBS ranked first.

For perspective, along with candidate-specific stocks, these selection considerations are provided for the averages of over 3,300 stocks for which MM price range predictions are available today. Top 20 ranked (by of) of these forecasts, and the forecast for the S&P500 Index ETF as a proxy for the stock market can also be noted.

The RMBS’s 36 basis point/day outlook, when compounded over a year of 252 market days, adds to the 142% gain in [K] if maintained for one year. But his high price target over the next 3 months of $133.91 at +17% above the current forecast price of $110 leaves the remaining +125% to be made up of other select investments capable of making gains at the same rate of 36 bp/day in the remaining 206 market days of the year, if it takes the previous average of 46 days to gain this +17%.

All of these ifs are what make it easy to track scores by simply adding up the base points achieved and the days it took to achieve them, then dividing them by each other to get an average CAGR for your portfolio.

Among the top 20 of today’s 3,203 MM price range predictions, their high win odds (86 out of 100) and short holding periods (36 days) drive their average CAGR to 322%. Here, RMBS compares favorably at +142%, in contrast to MM’s predicted population CAGR of 34% and SPY’s at +30%.

Recent Trends in RMBS Price Range Predictions

Figure 3 shows the daily forecast of the MM Hedging Implied Price Range for the last 6 months as vertical lines. Unlike the “technical analysis charts” only of past prices, these are forward-looking expectations prizes yet to come in the coming months.

Each forecast is divided into upside and downside price change prospects by the big dot of the stock market’s closing price on the day the forecast was made. They are records of direct expressions of what is reasonably expected and where capital has been put at risk, not hypothetical hopes of past price repeats.

picture 3

Forecasts induced by RMBS equity hedging

blockdesk.com

(used with permission)

The small image at the bottom of Figure 3 shows the daily record for the past 5 years of where market quotes divide each forecast into up and down proportions. The current Range Index of 18 indicates that less than a fifth of the full forecast range is down, and more than 4/5 is up. Typical RMBS valuations have on average been much higher than the current outlook, an indication of a likely higher price ahead.

Conclusion

The above comparison of rambus inc. with its top competitors indicates that a purchase of the stock at this time should provide capital gain satisfactions in the coming months.

Michael J. Chiaramonte